According to housing figures from Realtor.com, the nationwide median list price of homes for sale reached $442,500 in May, up 37.5% since May 2019. But median price per square foot, which per Realtor.com can be seen as a better indicator of property value, has grown by 57.5% over that same timeframe.
A similar gulf can be observed when comparing year-over-year numbers: median list prices are up just 0.3% annually, but median list price per square foot is up by 3.8% since 2019.
One reason for the gap, Realtor.com noted, is that the share of smaller, less pricey homes within total inventory has risen. That helps bring down median price somewhat even as per-square-foot prices remain on a sharper upward trend.
Danielle Hale, Realtor.com’s chief economist, said that the jump in per-square-foot prices highlights the ongoing benefit that the high-priced environment has been reaping for homeowners building outsized equity.
“In addition to higher median list prices and fewer homes for sale versus 2019, the increase in median price-per-square foot suggests that the typical home on the market today is worth 52.7% more than before the pandemic, more than double the roughly 23% increase in consumer price inflation in this period,” Hale said.
“The specifics will vary from market to market, but the data suggest ongoing opportunity for many sellers. Though with mortgage rates still much higher than many existing homeowners enjoy, this opportunity favors sellers who don’t have to replace a mortgage, such as investors or second homeowners looking for an exit or equity-rich homeowners looking to downsize in their current area or to a lower-cost region, as well as those planning to rent their next home.”
Of the 50 metros analyzed by Realtor.com, almost half posted a median price-per-square-foot increase of 50% or more since 2019. In some cases, it was vastly more: price-per-square-foot New York, for example, has vaulted by an astounding 84.7% in the last five years. In Boston, the increase since 2019 was 72.9%, while Nashville logged a 68.6% jump.
