# Price per Square Foot

September 21, 2011 TERM

## What is Price per Square Foot?

Price per square foot is a calculation of the value of each square foot of area of a house, condo or any building. It is a simple, but useful calculation that is mostly used to compare similar properties. The price per square foot can be calculated on the list price or the selling price.

For example:

If a 1232 square-foot condominium unit sells for \$127,500, the price per square foot would be \$127,500/1232ft2 = \$103.49/ft2.

So each square foot of that condominium costs the buyer \$103.49.

Per square foot is often abbreviated as “psf”  in the real estate industry. So in the above example, the amount would simply be written “103 psf”.

## Real Estate Agent Says

The price per square foot typically decreases as the square footage increases, so comparing properties that are vastly different from each other size-wise is not recommended. But when comparing homes of similar size, the price per square foot becomes the first metric used in determining the value of a home. Price alone doesn’t really tell you much about something, because you need to know what you’re getting for that price.

## Why Does It Matter?

Price per square foot gives you a way to monetize each square foot of a property. It is a great way to compare like properties but also to see what other factors do to a property. Differences like location, style, age and condition are all better explained by price per square foot than by just price alone.