It’s no secret that how much home you get for your money is different depending on where in the U.S. you buy. But do you really know how sizable those differences are?
A new study from Realtor.com highlights the enduring chasm in home prices across the country. The real estate website’s data team named a “strategic selection” of cities nationwide and compared their per-square-foot prices.
“Price per square foot is a good benchmark because it’s a way to compare homes in an apples-to-apples way,” Andrew Chen, a personal-finance expert and founder of Hack Your Wealth, told Realtor.com.
American homebuyers pay $123 per square foot on average, although that average is impacted by distant extremes. Price per square foot generally skyrockets when population density and lack of space affect demand, while factors such as high construction costs or strict regulations (e.g., higher building fees) also play a part.
Take New York City, for example, where all of the above is true. The median price per square foot for a home there is $1,106 — almost nine times the national average. That price varies by borough and neighborhood, of course. In the Bronx, for instance, that figure falls to $316. But in certain parts of the metro areas, such as the most expensive areas of Manhattan, prices exceed $10,000 per square foot, according to a report by real estate analytics company NeighborhoodX.
“That basically means a million bucks will buy you a large walk-in closet,” Realtor.com’s report stated.
Consider that, at the time of the study (August 2019), the nationwide median listing price was $305,000. Taking New York’s median price per square foot into account, that would net a buyer a home of 276 square feet. And New York wasn’t even the priciest city per square foot. That distinction belongs to Boston, where the same price would get a buyer 263 square feet of space.
Not every large market is squeezing buyers, however. Other cities in Realtor.com’s study offer much more bang for the buck. These include Dallas, where the national median list price can buy you 1,419 square feet, or Chicago, where a median-price buyer could afford a 1,580-square-foot home.
Buyers who really want to stretch their legs should look for their next residence in Detroit. The Motor City’s average price of $42 per square foot falls well below the national average, meaning $305,000 can buy you a home of 7,262 square feet. No wonder the city is attracting so many millennial buyers.
Realtor.com notes, however, that the miniscule price per square foot in Detroit is a bit deceptive. Detroit’s bumpy fortunes since the Great Recession have left its renaissance just as uneven from a geographic standpoint.
“That statistic of [$42] per square foot in Detroit is misleading because it takes into account all 140 square miles of Detroit, including the blighted areas,” said Susan Bozinovic, a local real estate agent with Century 21 Town and Country. “If we are to narrow down into hot spots, the price per square foot can easily go upward of $300.”
Other cities in Realtor.com’s study included San Francisco, where the national median price would buy a home of 304 square feet. In Los Angeles, the median price would buy 472 square feet. Washington, D.C. (740 square feet), Seattle (672 square feet) and Miami (974 square feet) were also part of the study.