Talk:Real estate pricing

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[edit] Statistics

 Please help improve this article or section by expanding it.
Further information might be found on the talk page or at requests for expansion. (January 2007)

Useful lists might include:

  • Cost in various U.S. cities [1]
  • Cost in various world cities [2]
  • Cost by U.S. state

-- Beland 18:28, 25 January 2007 (UTC)

Thanks! Great source, I'll see how I can incorporate some of that info later. Happy editing, Signaturebrendel 20:54, 25 January 2007 (UTC)

[edit] lame lead

The lead doesn't summarize or introduce the article. It just defines the mean and the median.--76.81.164.27 17:45, 31 March 2007 (UTC)

[edit] Mean and Median prices are for sales, not listings.

So I'm re-wording those descriptions. 68.122.2.50 22:32, 20 May 2007 (UTC)

Done. Point is, nobody pays attention to what's for sale, they pay attention to what actually sold. As formerly described in the article before this correction, mean and median prices of whatever is listed in a market are basically imaginary figures. I could influence an entire marketplace if I priced my home at a high enough price, according to the former description, whether someone were to buy it from me or not. That's why the reported figures only reflect sales, not listings. 68.123.47.97 22:49, 20 May 2007 (UTC)
Well, yes you could influence the market with the manner in which you price homes, but I get your point and thank you for your improving the article. Regards, Signaturebrendel 01:08, 21 May 2007 (UTC)

[edit] Price / Sq Ft

What is included in the sq ft. Two houses both the same sq ft. One has no garage. The other has a 2.5 car garage completely finished on the inside. How is that factored into the house's "Sales Price Per Sq FT"? The best way calculate price per square foot is to first, select a housing quality level as this will effect the price per square foot. There are generally four different levels with the highest level 220% more expensive to build than the least expensive. The next adjustment to price per square foot is the area where the house is built. Construction costs vary in different areas. The garage should be added separately as the costs per square foot of building a garage are quite a bit less than areas for building the living areas. An excellent resource for finding the 2008 price per square foot construction costs for different zip-codes and construction quality is found at www.ushousingmeltdown.org Fundamental#2 Replacement Costs.


In the above scenario the price per sq. ft. would be higher in the latter house. Example:
  • House A: 1,200 sq. ft., 3 bd, 2bd, Parkwood Heights Drive, no garage: $630,000... $525/sq. ft.
  • House B: 1,200 sq. ft., 3 bd, 2bd, Parkwood Heights Drive, 2.5 finished garage $670,000... $558/sq. ft.
Both houses are the same, except for the garage. The garage adds $40,000 to the total price of the house B. Thus the addition of 2.5 car garage also adds $33 per square foot. Why? Becuase now we're divding $670,000 by 1,200 instead of $640,000 by 1,200. Remember, so long the percentage increase in price is greater than the increase in square footage, the price per square foot will rise. Hope that helps! Signaturebrendel 00:45, 3 July 2007 (UTC)


I guess you answered my question. When you are talking about sq ft of a home you are talking about sq ft that has been allocated to living space. You are then adding the cost component only for the sq ft that has not been allocated to living space to come up with a cost per sq ft associated with both the living space and non living space if any.

Living Space Structure* = 1,200 sq ft Garage Space Structure = 400 sq ft Cost Per Sq ft* = Total Price / 1,200 sq ft (of living space)

House A: 1,200 sq. ft., 3 bd, 2bd, Parkwood Heights Drive, no garage $630,000... $525/sq. ft. [Foot print of entire house structure 1,200 sq ft]

House B: 1,200 sq. ft., 3 bd, 2bd, Parkwood Heights Drive, 2.5 garage $670,000... $558/sq. ft. [Foot print of entire house structure 1,600 sq ft]

House C: 1,600 sq. ft., 3 bd, 2bd, Parkwood Heights Drive, no garage $670,000... $418/sq. ft. (Note: Garage converted to 400 additional sq ft of living space.) [Foot print of entire house structure 1,600 sq ft]

House D: 800 sq. ft., 3 bd, 2bd, Parkwood Heights Drive, 2.5 garage $630,000... $788/sq. ft. (Note: Excess living room space converted to 400 additional sq ft of garage space.) [Foot print of entire house structure 1,200 sq ft]

This bring me to my conclusion that in my area price/sq ft is a meaning less number. If you live in an area of track homes, where every home is basically the same, then sq ft may be more meaning full. In my area homes on every street have a wide range when it comes to parking spaces. There are one car garages, two car garages, no garage, car ports, and paved, unpaved with or without covered ports, one or two spaces. There are even a few that have no on site parking at all. Their parking may be houses away next to someone else home. It seems at times that homes with the same “sq ft”, beds and baths, sell for the same price no matter what type of parking is available in my area. Most home listing don't even mention the garage, but they always mention the price/sq ft along with the number of bedrooms and bathrooms. I find the same thing for condos in my general area. Everyone talks and plays up the price/sq ft. They really got a lot of money per sq ft or they got very little money per sq ft. You ask did it have a garage? Answer: I'm not sure.

I understand that other things affect the price such as kitchen, bath improvements and lot size etc.

Thanks, for your work with Wikipedia.

[edit] Cap rate and NPV methiods

I know I've seen an article doing and explaining these methods elsewhere in wiki. Can someone link or incorporate such info in this article because this is the topic of the article/.Radio Guy (talk) 00:10, 29 December 2007 (UTC) Cap rate is a metric used in real estate to compare one property to another. The Cap rate is the yield an investment generates expressed in a percentage. Cap rate is Net Operating Income, before debt service, divided by property price. For example, if you have a property generating $100,000 a year in net rental income, before debt service, and the price of the property is $1,000,000 then the Cap rate is 10%. 100,000/1,000,000 equals 10 percent. Here is a resource for more on Cap rates and a calculator to calculate them. Check Fundamental #3 at www.UsHousingMeltdown.org