Not when using square footage to estimate a home’s value, according to tax assessors and brokers interviewed in this NYT article (and thank you, Krazy Kat for forwarding it to me.)
Unmeasured areas like a renovated basement or a garage in-law unit — or even a superior location — may account for the higher price the sellers are asking. And that higher price inevitably increases the price per square foot. .
Only in large lookalike housing developments — or in homogeneous neighborhoods like the Highlands in White Plains, where the vast majority of the houses are small prewar colonials and Tudors on similarly sized lots — is price per square foot a relatively reliable measure of value.
Still, as a bargaining tool, price per square foot has been getting a lot of play in recent months. Though often employed in commercial real estate, and in less idiosyncratic residential real estate like condominiums and co-ops, it has of late become “a hot topic in the single-family-home market,” said Chris Meyers, the chief operating officer of Houlihan Lawrence, who described it as “a big driver in many buyers’ decision-making process.”
As a result, some assessors are being besieged by homeowners demanding to know why their price-per-square-foot figures are so high — why upgrades like their finished basement or the heated and fully furnished family room in what was once a garage have been left out of the equation.
“This is driving me crazy,” Michele Casandra, Pelham’s assessor, said recently from under a growing mound of paperwork. “Even if I wanted to change something, I couldn’t, because we follow state regulations and appraisal guidelines. We don’t invent them.”
In Ms. Casandra’s opinion, price per square foot should not even apply to single-family homes in the suburbs because there are too many variables involved. “Maybe in a city when you’re dealing with specifically defined living units without basements or attics,” she said, “but certainly not somewhere like Pelham with such a variety of homes — Victorians, colonials, Tudors that weren’t meant to have basements used as family rooms.”