by: filocarbo
When I take my buyers to see homes they are looking out for location, number of bedrooms, kitchen, bathrooms and curb appeal.
May I suggest you also start looking at the price per square foot of the homes. It's a great way to tell if a home is a good investment or not.
Here's how it works:
Price: $160,000
Square Feet: 2,130 Sq. Ft.
$160,000 / 2,130 Sq. Ft = $75.12
Price per Square Foot: $75.12
" I could never build a home for $75 per Square Foot ($160,000 / 2,130 = $75.12 per sq. ft!!)" said my builder friend after looking at this house.
So how do you know if it's a good Price Per Square Foot? To best answer this we need to take quick look at past home prices in Reno:
(Report from Reno Bureau of Business and Economic Research)
Reno Average Sales Price Per Square Foot:
1993: $78 / Sq. Ft
1994: $83 / Sq. Ft
1995: $87 / Sq. Ft
1996: $88 / Sq. Ft
1997: $90 / Sq. Ft
1998: $93 / Sq. Ft
1999: $94 / Sq. Ft
2000: $98 / Sq. Ft
2001: $104 / Sq. Ft
2002: $117 / Sq. Ft
2003: $136 / Sq. Ft
2004: $178 / Sq. Ft
2005: $217 / Sq. Ft
Seeing this report we would understand why my friend said " I can't build a house for $75/ Sq. Ft!". It's like buying a house for 1993 prices ($78/ Sq. Ft) in 2009. Whew. That's a good deal!
So if you want to know if you're getting a good deal take this graph with you and compare the price per square foot (this graph versus the house you're looking at).
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