Average prices of homes sold from 2008 - 2024

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After the decrease in home prices during the financial crisis of 2008, a gradual increase in home values was seen across all regions. Since we saw a great increase in home prices during 2020-22, due to the pandemic, some stabilization has occurred with some minor fluctuations in home prices. Currently, property values are up 6.5% in the past year whereas during the pandemic, home prices rose 20% per year.

In the month of May, 61 homes sold compared to 56 in April. The average sale price in May was $429,146 compared to $435,954 the previous month. In these last two months the average home sold was in the 1,800- to 1,900-square-foot range and the average price per square foot was in the mid $230 range. It is imperative to understand that smaller homes sell for more dollars per square foot compared to larger homes. The reasons for this are simple:

1. Smaller homes are often in higher demand because they are more affordable and attract a larger pool of potential buyers, including first time home buyers, downsizers and investors. This increased demand can drive up the price per square foot.

2. Larger homes are generally more expensive in total price making them less affordable to a broader segment of buyers. As the total price increases the pool of potential buyers decreases, which can lead to a lower price per square foot.

3. The value of the land on which a home sits can significantly influence the price per square foot. Smaller homes often occupy smaller parcels of land. This can increase the price per square foot of smaller homes.

4. The cost of building additional square footage in a larger home can be lower per square foot. Think about the most expensive rooms to build: kitchens and bathrooms. Larger homes tend to only have one kitchen and maybe only one or two extra bathrooms. Also, builders can spread fixed costs such as land, permits and infrastructure over a large number of square feet reducing the overall cost per square foot.

These factors can collectively contribute to the phenomenon where larger homes sell for less per square foot compared to smaller homes.

Peggy Horn is the Office Manager at Coldwell Banker Frontier. She is happy to answer any questions you may have regarding the real estate industry. You can reach her at [email protected]/.