How Price Per Square Foot Works
Price per square foot is the single most common way buyers, sellers, and agents sanity-check a listing. The formula is simple: divide the price by the home's finished living area. A $320,000 home with 1,600 square feet works out to exactly $200 per square foot. That one number lets you line up homes of different sizes and immediately see which is asking more for its space.
On its own, though, the figure means nothing. A $200 per square foot home is a bargain in one neighborhood and a rip-off in another. The value comes from comparison, which is why this calculator asks for recent comparable sales. It averages their price per square foot and benchmarks your target property against it.
Worked Example
Say you are looking at a 1,600 square foot home listed at $320,000, or $200 per square foot. You pull three recent nearby sales: $305,000 for 1,550 sq ft ($196.77), $342,000 for 1,720 sq ft ($198.84), and $298,000 for 1,480 sq ft ($201.35). The average of those comps is about $199 per square foot.
At that average, your 1,600 square foot target would be worth roughly $318,400, almost exactly the asking price. The calculator flags this as priced in line with the market, so you would negotiate on condition and terms rather than on an obvious mispricing.
Practical Tips
Use true comparables. The closer the comps are in location, age, condition, and size, the more trustworthy your benchmark. A waterfront home or a recent gut renovation should not anchor the price of a dated interior model.
Watch the square footage source. Listing square footage is often optimistic. When possible, use the figure from the county assessor or a recent appraisal, and apply the same standard to every comp.
Remember the size penalty. Smaller homes carry a higher price per square foot because kitchens, baths, and the lot are fixed costs spread over fewer feet. Compare like with like in total size.