Arizonans pay attention to price per square foot: Total price divided by the total square feet of living space. And yes, it’s both – useful & annoying. Among its many uses, it’s a popular way to track pricing trends for any given market segment (see select city and zip codes below).
It’s ‘annoying’ as a gross measurement, particularly in larger sample sizes, as it doesn't account for the many components that affect market value – location, lot size, condition, vintage, etc. to name a few.
In spite of the qualifiers it is a useful barometer of value, not only for showing pricing trends, but also establishing relative boundaries for what is obtainable in any given market segment.
For example, a home can be ‘over-improved’ so that while a ‘cost basis’ might suggest one value, the price per square foot of otherwise comparable properties will set limits on what a buyer will pay (‘market basis’)…or what a bank appraisal based on sold comparable properties will support.
With that backdrop we can now look at the price per square foot trends by select cities across the State of Arizona. Again, being mindful that the city view perspective is necessarily broad brush.
Also note that the more jagged trend lines will be typical of smaller market samples, where one sale can skew the data for that month.
You can come to your own conclusion looking at the area data of interest. What is generally apparent is the price improvements over the last 2 years. At the same time we currently see a leveling off in most markets as demand has moderated with increased prices. There are notable exceptions – Prescott, Cottonwood, Sedona & Flagstaff where the high country continues to roll.
Price per square foot trends, while a bit ‘annoying’ do help us visualize general pricing in the ebb and flow of supply and demand.
For the specific trend in your area of interest contact me and I'll get to work and shoot it over.
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