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Two New England states rank in top 5 for cost per square foot

Jul 21, 2023

By Bobby Kania -- Wealth of Geeks

A new study by Matin Real Estate reveals striking differences in the average cost per square foot of residential property across the United States.

Land values, building costs, home demand, and regulations influence real estate pricing resulting in prices of $700 per square foot in the most expensive states down to around $130 per square foot in more affordable regions.

Hawaii was the most expensive cost per square foot of property at $694, which is attributed to the state’s average house price of $850,000 (the highest in the country) coupled with an average house size of 1,248 square feet.

Here are were the top 5:

Rhode Island made the list despite having the fifth-smallest average property size.

Note Citing reports by a real estate analytics firm, reported far more conservative numbers for Massachusetts: a median sales price in June of $612,250 for single-family homes and $545,000 for condos, according to The Warren Group. Those figures broke monthly records.

The gap is even wider between the average home price in the Matin Real Estate study and the June figures from the Rhode Island Association of Realtors. The Rhode Island realty group said the median sales price for June were $376,450 for a condo and $442,750 for a single-family home.

Other states in the top ten included Washington, New Jersey, Montana, Oregon, and Colorado.

These states offer the lowest average cost per square foot:

The average cost per square foot for a house can vary greatly between states due to several key factors. States with high land values, labor costs, building materials prices, demand, and strict regulations tend to have the highest prices per square foot. For example, coastal states like California, Hawaii, and New York have costly land limited by geography, high construction wages, and stringent building codes, all driving up housing costs.

Dense Northeastern states like Massachusetts and New Jersey also have high taxes and land prices near major cities that make homebuilding more costly. On the other hand, states with more available land, lower wages, and less regulation, like Arkansas, Alabama, and Oklahoma, have significantly lower average square foot prices for residential real estate.

Local factors within states also have a big influence, with cities being more expensive than rural areas. Overall, limitations on developable land, high taxes and wages, strong demand, and stricter building rules are the key drivers that cause certain states to have higher average costs per square foot for housing.

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