A report released on Wednesday real estate agent network A key measure of U.S. home values is growing faster than a more common measure of listing price, research shows.
The analysis shows that over the five-year period ending in May 2024, the price per square foot in the 50 largest metropolitan areas in the United States increased by 52.7%. Dollar.
“The price per square foot metric is an important metric to watch,” Realtor.com senior economist Ralph McLaughlin said in the report. “Changes in this metric can be more reliably measured than looking at changes in the median list price.” Measuring the value of a home over time.”
The report goes on to explain that “price per square foot is a key metric for real estate because it allows for easy comparison of different properties, regardless of their size.” Buyers, sellers, and agents can then evaluate whether a property is priced appropriately.
Kara Amir, coldwell banker Brokers licensed in California and Florida said in reports that price per square foot is just one of many data points that deal stakeholders should pay attention to.
“The price per square foot is really deceptive,” Amir said. “Smaller homes may cost more per square foot than larger homes, which may skew the numbers.”
She advises agents to help their clients focus on comparable listings. This will provide a more comprehensive understanding of individual homes and communities through overall condition, recent upgrades, location, lot size and more.
“Even if the market is stable, the median price can fluctuate,” McLaughlin added. “For example, an increase in the share of smaller homes on the market could lower the median list price without affecting the overall value of the home.”
Realtor.com found that among the 50 largest metropolitan areas in the United States, New York City, Boston, and Nashville have seen the highest home appreciation rates, with appreciation rates of 84.7%, 72.9%, and 68.6%, respectively, from May 2019 to May 2024. %.
Hannah Jones, senior economic research analyst at Realtor.com, said soaring home prices in New York City and Boston are largely attributable to “shifting work norms” after the pandemic.
“As remote and hybrid work arrangements become more common, buyers are flocking to areas with reasonable commutes and good value for money,” Jones said.
