San Diego Housing Market News and Analysis
Using PPSF as a value measure
User Forum Topic
Submitted by Jack on June 17, 2008 - 7:12pm
Is anyone using Price Per Square Foot as a measure to figure out a house's value? I know it's not the only measure to consider, but as an analyst I'm more about the numbers and trends and find those easier to work with.
For example, I know that you could not expect to compare a 1,500sqft super upgraded SFH with a 3,000sqft SFH with minimal upgrades, if any, in different neighborhoods (especially if one is 20 years older).
BUT, what if you were comparing a 1,500sqft SFH with a 2,500sqft home, both were built in the same year, have similar upgrades, are on the same street, and are part of the same HOA...then couldn't you justify using the PPSF of one of them that recently sold to at least get a ballpark estimate? For example, if the larger home closed within the last month for $300/sqft and the smaller is selling for $350/sqft, would it be fair to say the smaller home is overpriced? Assuming the larger home has a larger yard, and more bedrooms, would it be fair to say that the smaller home should be priced at no more than $300/sqft?
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