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What is the average price per square foot of a home?
My husband and I bought a home this past summer and we got a great deal on it. We paid about $62 a square foot and it is worth more than that. We are thinking of doing a kitchen remodel because the kitchen is the only piece really dragging down the value of the home.
We plan to live in the house 4 more years, and the kitchen remodel will cost about $30,000. For all the work that will be done, this is actually a really low cost.
Here's the problem...just to break even on the house (if we do the remodel), we'd have to sell for $74 a square foot. We live in a modest town in Indiana and I'm not sure what is average around here. The house is older, but everything is fresh and new and very chic...but I'm not sure if it could compete with houses built in 2000+ just because a new house is more appealing. HELP!?
3 Answers
- kevin hLv 51 decade agoFavorite Answer
Well, the biggest part of the real estate market is location and timing. We bought a house that was $63,000, and appraised only at $58,000. We sold it 3 years later for $159,000. We did very little remodeling. It really does depend on location. As far as what the experts are saying, the average recoup on dollars put into a kitchen remodel is around 87%. So, for every $1, you will get around 87 cents back on the sell. Which means you will be able to hike the price of your home by about $26,000. It is really a numbers game. So, add the 26k to your home's value and divide by the square footage, and that should tell you where you sit for the price per sq ft after you remodel. In my opinion, the home is not an asset unless it is totally paid off. It is a place that you live. So, do it for yourselves first, and then if it pays off when you sell, than that's just an added bonus. If it doesn't, than it won't make a difference, because you had the kitchen that you wanted while you lived there. Well, good luck to you.
- Anonymous1 decade ago
Appraisers rarely if ever use cost per sqaure foot. They know the best way to determine value is Comparison.
You look at what other houses like yours are selling for, not what they are asking but what the owners actually received.
Cost per sqaure foot is an errored and flawed way of determining value in residential property. Cost per sqaure foot is mostly used for commercial rental property.
The reason why it is so errored in residential property is that I can show you homes right in your area the same condition, style and architecture, sqaure foot, I mean pretty much basically the same, but the cost per sqaure foot will be dramatically different between the two and besides...buyers dont shop that way.
When a buyer goes to buy your house they don't look at cost per sqaure foot they look at what other homes like yours are selling for.
Too often folks want a certain amount for their house but that has nothing to do with what the house is worth. Keep away from that cost per sqaure foot mumbo jumbo as in the real world nobody is going to care.
What they are going to look at is your house and is it worth the price. They will compare it to others they can get in the area now.
Trust me, that cost per sqaure foot is errored and flawed and only used when renting commercial property.
- hotdogseeksbunLv 61 decade ago
You need to research properties in your town. What do they sell for a sq.ft? This will give you an idea.
