Price Per Sq Foot Myth

In Park City, some home buyers and sellers believe price per square foot is the best way to determine a property's worth. But this idea is more of a myth than a fact. It's a bit too simple and misses out on what makes a house special. It's like judging a painting by size without considering the artist's skills or beauty.

In real estate, location, design, construction quality, and high-end features are important in determining a property's value. However, these factors aren’t captured by square footage alone. Also, consider what’s happening in the housing market.

Thus, the price per square foot can give an incomplete picture of a property's true value. To accurately assess a home’s worth, you must consider its location, style, age, and all the unique features, both inside and out.

This is especially true in Park City, where homes and condos can be highly customized. Ultimately, price per square foot is just one piece of the puzzle.

Below, we discuss four ways an unqualified price per square foot DOES NOT capture a property's value, including when to use this metric and when it may fall short.

Do You Think These Two Properties Should Be Valued Using Price Per Square Foot?

The two homes on the right are similar in size but differ dramatically in views, architectural styles, and ages.

The price per square foot for a ski home can vary threefold. Buyers seeking ski-in/ski-out access may pay more for proximity to ski resorts, while factors like access to ski lifts, the Park City School District, and local amenities further complicate a simple square footage comparison.

2. Views: The Park City area offers some of the best recreational views in the United States. Although the buyer and seller determine the value of a view, a home with superior vistas can be worth up to 20% more.

3. Architectural Style, Condition, and Age: Detailed or custom designs come at a higher cost. For example, slab-on-grade, multi-story, walk-out basements, and split-level homes each have distinct construction costs. Boxy, undetailed homes are generally cheaper to build than those with varied roof pitches, curves, or creative layouts.

A good example is that homes built after 2013 in areas like Promontory often see a noticeable increase in price per square foot, as modern designs featuring glass and steel drive up construction costs.

4. Finishes: Interior and exterior finishes—such as flooring, cabinetry, countertops, paint, stucco, brick, and rock—make up a significant part of a home's construction cost. For example:

• Flooring: Materials like carpet, stone, hardwood, laminates, and concrete vary dramatically in cost. Travertine can range from about $2.50 to over $25 per square foot.
• Woodwork/Cabinets: The type of wood, stain, finish, and level of detail can mean that an exotic cabinet door may cost ten times as much as a simple one.
• Counters: While granite is common, there are multiple grades available. More exotic options can be up to seven times more expensive—even standard surfaces like Formica can carry a high price tag.
• Paint: Multi-tone or artistic finishes cost more than standard paint.
• Fixtures: Items such as handles, knobs, plumbing, and lighting can be significant. For example, a single bathroom faucet might range from $25 to $4,000.
• Windows and Doors: The quality, size, and energy efficiency of windows and doors can easily add tens of thousands of dollars to a home's cost.
• Landscaping: A lush backyard with a pool can add up to 50% to the cost of a small home, yet landscaping is rarely factored into the price per square foot.
• Systems: The cost and quality of heating, cooling, plumbing, and electrical systems can vary widely.

5. Volume of Home: Beyond square footage, the volume of a home—such as higher ceilings, multi-level spaces, or open floor plans—can enhance the living experience by improving the sense of space, airflow, and natural light.

6. Deck Space: Outdoor living areas, especially in Park City, add usable space at a lower construction cost compared to interior spaces. A well-designed deck offers seasonal appeal—from summer al fresco dining to a cozy fall retreat.

When to Use Price Per Square Foot in Park City, Utah

Although price per square foot isn’t the whole story, it can be useful in certain situations when assessing the value of homes and condos in Park City. Consider using this metric when:

1. Comparing Similar Properties: This metric provides a quick comparison for homes or condos that are similar in style, age, and location—much like comparing prices for similar bags of apples.
2. Understanding Market Trends: An average price per square foot increase in a given area can indicate a hot real estate market.
3. Budgeting for New Builds or Renovations: Knowing the local average helps set realistic budgets for construction or renovation projects.
4. Evaluating Property Upgrades: When selling, the price per square foot can help quantify the added value of upgrades such as a new kitchen or bathroom—particularly in upscale markets like Park City.

Remember, while useful, price per square foot is only one metric. Always consider location, views, architectural style, age, and finishes to fully understand a property's value.

When Shouldn't I Use Price Per Square Foot?

There are situations when relying solely on price per square foot may be misleading in Park City:

1. Unique or Custom Properties: Homes with distinctive features or custom designs may have added value that is not reflected in a simple per-square-foot calculation.
2. Vastly Different Locations: Comparing properties in different Park City neighborhoods can be deceptive, as highly desirable locations naturally command higher prices.
3. Differences in Condition or Age: Older homes may require more maintenance, while renovated homes might fetch higher prices even if their square footage is similar.
4. Large Properties: For expansive homes or estates, the price per square foot alone doesn't capture many high-end features and land size factors.
5. Highly Individualized Finishes and Features: Premium finishes such as custom cabinetry or advanced home technology can significantly boost a home's appeal and price without affecting the square footage.

While price per square foot is a useful starting point, always evaluate the unique aspects of each property to understand its true worth fully.

Park City Real Estate

Whether buying or selling in Park City, I am dedicated to educating my clients on accurately determining property value. Price per square foot can be beneficial once a substantial number of the above factors are considered and when comparable properties have been thoroughly evaluated.

For the latest insights, check out Park City home prices and our current market update to see what’s happening in real estate in Park City, Utah.