Know Your Square: Understanding and Making the Most of Every Square Foot
Monday’s blog highlighted the top 3 hottest summer markets, based on the highest prices per square foot of homes sold in ZipRealty’s service areas. So now that we’re in a square frame of mind (and remember everyone, it’s hip to be square), we thought we’d dig deeper into this thing that we use so much to gauge property value– in some cases, perhaps more than we should.
First, for the newbie, what is a square foot? How’s it different from a foot?
ZipRealty REALTOR® Marissa Kjera explains: “A regular foot is a measurement of how long something is (think of the length of a ruler), where square footage is a measurement of space (think of the amount of area taken up by one linoleum tile). The square footage of a room is figured by measuring the length of a room by the width of a room, and multiplying those two numbers together (a 10 foot wide and 12 foot long room would be 120 square feet in area).”
How does a first-time buyer or buying family plan for enough square footage, especially for kids as they grow?
Clearly subjective, this decision can still be made more intelligently with better information. Marissa says that in general, most people opt for as much as they can afford. “People do tend to want more space as families grow.” However, she also points out that “this is normally measured in terms of how many bedrooms, plus spaces, yard space, ect. that the property has. Square footage can be a helpful piece of information, but it is not as primary as other factors. The layout/functionability of the space is as important and maybe more important than the square footage.”
ZipRealty REALTOR® Keith Webb agrees. His point is that square footage is not the most important factor in a home’s value, though many new buyers may be using the total square footage and the price-per-square foot numbers as their primary considerations. “Say you discover a bathroom is 200 square feet. Is this good or bad? You can’t know until you also know what kind of materials were used to build that bathroom, what kind of tile, sink, light fixtures, shower. Is the toilet low flow? Is the room insulated? These factors should be more important than square footage, because dealing with worn out, cheap, or otherwise shoddy interiors and appliances can add a lot to that purchase price.”
In other words, the price-per-square foot can go up if what’s housed upon those square feet isn’t good quality.
How are maintenance and taxes affected by square footage?
Aside from Keith’s very good point above, he has another one. Knowing the year a house was built, and the construction milestones that correlate with that year, can save you a lot of money long term. When did insulation become standard in your state’s building history? What about the type of material used for foundations? Heating systems? Plumbing pipes? Electrical wires? Earthquake retrofitting? Are there eco-friendly, sustainable materials and appliances that will save you money over the years?
Marissa chimes in that, “Obviously heating a larger home will cost more than a smaller one. But, the energy efficiency of the house is more of a factor than the size of the house. Replacing a roof that is twice as large as another roof, will not cost twice as much. But here again, another factor (the type of roof) is more telling than the size of it.”
As to taxes, most states tax on home price rather than square footage, but home price is often tied so square footage, so again, economic concerns must come in. How much you can afford may be a bigger consideration that just how much per-square-foot is a “deal” for the area you’re interested in.
1. San Francisco, CA, which has much diversity in terms of what one district within the city might fetch per square foot when compared with another district, has a great new resource, which we first read about on this city’s excellent The Frontsteps blog. This resource, the brand new Price Squares website, not only give price-per-square information but also offers real time data showing if the current price is up or down.
2. In New York City, you can calculate the price per square foot of a home purchase or a rental here at NYCRG.
3. In the California’s Silicon Valley, get (very) candid reviews of homes for sale including price per square foot– and a description of each foot– at Burbed.com.
4. In Boston, read about the price per square foot in different neighborhoods as well as the pressures that drive them up or down at The Boston Real Estate Observer.
5. For commercial leasing, calculate the true cost per square foot once you account for space you cannot actually use for your business (actually, this isn’t a bad idea for residential living either. Probably shouldn’t count that 6 inch craw space below your home as “usable”).
6. Portland, OR posts regular updates on price per square foot at Portland.com.
7. Houston, TX: Find very intricate data on price per square from Altos Research.
8. ZipRealty’s home search feature will bring up listing information that includes price per square foot.
We’ve only scratched the square surface here. We know the community at large has plenty of tricks up its sleeve, so we ask you: what’s your best resource for measuring, tracking, and getting the best value per square foot? Or do you stand on the side of the big picture being more important, and more complex, than this four-sided shape upon which our sense of “home value” rests to heavily?