Just today, our man Rick wrote a pithy post on the delicate balance stricken between instinct and integers in the pricing of homes. He says:
Loosely speaking, you begin with a ballpark figure based on the average price per sq. ft. for like-sized homes in your neighborhood, and then adjust it up or down depending on the home’s particulars. … When fine-tuning a listing price, you leave the certainty of mathematics and enter the land of subjectivity (i.e., the real world). Here’s where experience and, dare I say, artistry come into play.
Sounds reasonable to me. Rick submits for our approval two homes, both listed at the same price, but one of which, he says, is still not quite worth the dough. Again, reasonable.
But I wonder: is worth determined firstly by mathematics (the price per square foot, perhaps? The cost of a recent renovation?), and secondly by impression and/or subjectivity? Take these two recently reduced, small Central Seattle properties: the 692-square-foot, two-story, three-year-old condo at 14th & E. Pine, listed at $334,900 (down from $339,000), and the 486-square-foot, single-story, 1916 cottage at 22nd & E. Pine, listed at $315,000 (down from $329,900). Both places are pricey, considering their square footage. But both are close-in, and both offer a small carbon footprint — lower square footage = less space to heat, for example. Could it be that those non-tangible perks are worth more than new appliances or extra rooms? Are they worth more than the math suggests?
Would you purchase a smaller home for its location, or even its smallness?