How to Calculate Price Per Square Foot
Price per square foot is the most common metric for comparing real estate values. It normalizes home prices across different sizes, letting you evaluate whether a property is priced fairly relative to others in the same neighborhood.
The Formula
Price Per Square Foot = Total Price / Total Square Footage
Step-by-Step Example
A home sells for $425,000 and has 1,800 sq ft of living area.
Price per sq ft = $425,000 / 1,800 = $236.11/sq ft
Comparing Properties
| Property | Price | Sq Ft | $/sq ft |
|---|---|---|---|
| Home A | $425,000 | 1,800 | $236 |
| Home B | $480,000 | 2,200 | $218 |
| Home C | $375,000 | 1,400 | $268 |
Home B has the lowest price per sq ft, but you're paying for more total space. Home C is the most expensive per sq ft, suggesting it may be in a better location or have higher-end finishes.
Important Caveats
- What's included: Always confirm whether price per sq ft uses total area or just finished/living area. Garages, unfinished basements, and outdoor space are usually excluded.
- Location premium: Price per sq ft varies dramatically within the same city. Waterfront or downtown properties command premiums unrelated to size.
- Quality differences: A small luxury unit may have higher $/sq ft than a large but dated home.
Rental Comparison
Price per sq ft also applies to rent: Monthly rent $2,400 / 950 sq ft = $2.53/sq ft per month
Use our price per square foot calculator for any property comparison.