Cost per square foot can be helpful measure of relative value (emphasis on “relative”)

     I received an email recently pitching a home for sale in Ocean Ridge Plantation, the multi-golf course community about 45 minutes north of Myrtle Beach and under an hour from Wilmington, NC.  With four good to excellent golf courses in play and another on the way, and with a full roster of amenities in place and a solid mix of ensconced residents and vacation home owners, Ocean Ridge is one of the more stable values on the southern North Carolina coast.

        The home listed in the email certainly fits the notion of value proposition.  At 4,000 square feet, four bedrooms and

four baths, and with views of two holes on the Lion’s Paw golf course, the $499,000 list price certainly seems fair, maybe even better than fair.  The realtor indicates the original price was $699,000 but the bank that now owns the home is anxious to sell.

        What especially caught my eye was that the realtor did a little helpful math by underscoring the list price per square foot, $124.  Understanding the cost per square foot of a home is helpful in two conditions.  First, for those couples waffling between buying an existing home or building one to their particular specifications, a cost comparison per square foot could answer the question, “To build or not to build?”  As the emailed listing states, you cannot build a home in the coastal Carolina area for $124 per square foot (more like $150 to $175, according to local realtors).

        Second, the per-square-foot calculation will give you a read on how good a bargain you are getting relative to other homes in the immediate

neighborhood.  Outside of older communities like Levittown, the legendary post World War II community on Long Island, NY, homes in a neighborhood are rarely exactly the same size and configuration and, therefore, the selling price for one is rarely precisely relevant to another.  In looking at larger and smaller home prices down the street, the square foot price gets you closer to an apples-to-apples comparison.

        On the other hand, when you compare one community to another, cost per square foot does not do anything more than make you feel better –- or, perhaps after the fact, worse –- about the decision you make.

        [Note:  I am pleased to say that one of my first customers, who purchased a home site five years ago in the aforementioned Ocean Ridge Plantation, recently wrote to announce that he and his wife would begin building their dream retirement home there early next year.  If you would like more information on Ocean Ridge or would like me to arrange a “discovery” weekend there for you, please contact me (click here)].

 

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