$/sq ft cant be looked at alone. You also need to look at the average sq ft. Larger homes sell for less per sq ft and smaller homes sell for more.
In the current environment with low end (i.e smaller homes) dominating the market the $/sq ft will be higher than it really is understating the decline. When we were booming, the newer/larger homes (i.e. mcMansions) dominated the market understating the increases.
Here’s a hypothetical example:
Last year average $/sq ft in an area is $300 and the average size is 2000 sq ft.
This year average $/sq ft in same area is $300 but the average size is now 1500 sq ft.
Looking at $/sq ft would show no decline while there was a significant decline because you are seeing $300/sq ft for a much smaller home.
