SOLD – 161 Nawiliwili – Highest Price Per Square Foot
How do you analyze the value of a home? Does the price per square of a home factor into your analysis? Should it? Maybe. Buyers look at all kinds of factors when considering value, and price per square foot is just one of many factors that come into play. I may be going out on a limb, but I really think it’s one of the least important factors to consider when purchasing property.
Highest Price Per Square Foot in the Neighborhood
For example, I recently sold a home in an upper-end neighborhood in Hawaii Kai. The property was smaller than many of the surrounding homes, but it was also in better shape than most. 161 Nawiliwili exuded charm and offered a beautiful ambiance combined with stunning views. It was a special property and the market thought so, too. It received multiple offers and it sold for the highest price per square foot in the neighborhood — $1,540 per square foot, to be exact! The average price per square foot is closer to $1,200. So, does that mean the buyers paid too much? Not necessarily.
What Determines Price?
Value is in the eyes of the Buyer and there is so much more than price per square foot to consider in determining price. The design and layout of a home are incredibly important. So, are the features, upgrades, and location. Even the “feel” of a home comes into play. Buyers buy on emotion and those emotions have a big role in buyer decision-making. Why do I share this? Because, if you are going to buy a home, it’s important to realize that there are many variables that factor into your purchase decision. Have you ever noticed that sales prices in any given neighborhood can vary greatly? Even cookie cutter homes with similar square footage can sell at vastly different prices. Why? There are lots of reasons, including timing, condition, features, upgrades, and yes, feel.
What’s Valuable for You?
When you buy a home to live in, it’s important to look at comparable properties, including active, in escrow, and sold homes in the neighborhood. You need to consider the condition of the comparable properties, along with cosmetic and capital improvements, and yes, even the price per square foot. But, most importantly, consider how you feel about the property. Can you see yourself living in the home? Or better yet, can you see yourself and your loved ones happy, comfortable, and safe living in the home? Does it meet your lifestyle needs? It is a good fit? There are definitely tangibles to consider, but those intangibles are equally, if not, more important. Consider the benefits you derive from buying the home, for example, your love of entertaining, need for privacy, sense of safety, time-saving convenience, etc. All of these benefits are intangible. All are important.
More Than Just Price Per Square Foot
So, the next time you look at the price of a home, just remember, there is a lot more than “price per square foot” in determining the value you assign to a home. In the case of Nawiliwili, it was the perfect fit for the family who bought it. They will derive many benefits from buying a home that meets both their tangible and intangible needs, and they are thrilled.