Why Price Per Square Foot Isn’t Always the Best Metric for San Jose Condos and Townhomes

   When buying or selling condos and townhomes in the San Jose area, particularly in desirable locations like Santana Row or Downtown San Jose, one of the most commonly misunderstood metrics is price per square foot. While it’s often seen as a quick way to measure value, it’s far from a definitive guide. Relying solely on this metric can lead to inaccurate pricing and skewed expectations—especially in San Jose’s unique condo and townhouse market.

Price Per Square Foot: Only One Piece of the Puzzle

   In the San Jose condo and townhouse market, price per square foot can vary significantly based on factors beyond just size. While it gives a rough idea of value, it doesn’t account for critical considerations like:

• Building Amenities: Condos in developments such as Axis Condos or The 88 Condos often feature amenities like pools, gyms, concierge services, or rooftop lounges. These amenities add value that isn’t reflected in the price per square foot alone.
• HOA Fees: Higher-end complexes often come with steep HOA fees. While a unit might seem affordable based on price per square foot, high HOA fees can dramatically impact overall affordability.
• View and Floor Location: In high-rise condos like those in Downtown San Jose, units on higher floors with better views can command higher prices per square foot than similar units on lower floors. Past San Jose builders have averaged an additional $10k per floor, making the view and location a crucial factor in determining value.

   These factors play a significant role in what buyers are willing to pay. Comparing two units solely based on price per square foot without factoring in these nuances is like comparing apples to oranges.

Unique Challenges in San Jose’s Condo and Townhouse Market

   San Jose’s condo and townhouse market comes with unique challenges that don’t apply to single-family homes. Here are a few that particularly stand out:

• Shared Walls and Common Areas: For townhomes, the layout and location of the unit within the complex matter. A corner unit at Sonora Condos with only one shared wall might command a higher price per square foot compared to an interior unit due to additional windows or easier parking access.
• Space Efficiency: Condos in urban areas like Downtown San Jose often come with highly efficient layouts. Smaller units can still feel spacious, and buyers might pay a premium for well-designed spaces that maximize functionality, rather than simply focusing on total square footage.
• Parking and Storage: Parking is a premium in the San Jose area. Whether a unit comes with deeded parking, additional storage, or bike storage can significantly influence buyer interest, even if it doesn’t impact the square footage of the unit.

The Contributory Value of Space in Condos and Townhomes

   A common misconception in the San Jose condo market is sellers assuming that more square footage automatically leads to higher prices. While this might be true in the single-family home market, condos and townhomes are more about quality than quantity.

   For instance, a 2,000-square-foot unit at The 88 Condos may not be twice as valuable as a 1,000-square-foot unit in the same building. If the smaller unit has better finishes, a prime location within the building, or a superior view, it could command a higher price per square foot.

   Buyers in the San Jose market are often paying for lifestyle, location, and amenities—factors that go beyond raw square footage.

Why Bigger Isn’t Always Better

   Larger condos or townhomes, especially those with awkward or inefficient layouts, can often have a lower price per square foot compared to smaller, better-designed units. Spaces like hallways, spare rooms, or extra nooks that don’t contribute functional value can dilute the overall price per square foot. On the other hand, a smaller unit in Santana Row with luxury finishes and a prime location could easily have a higher price per square foot due to its desirability and overall living experience.

When (and When Not) to Use Price Per Square Foot

   For real estate professionals working in the San Jose condo and townhouse market, price per square foot can be useful for quick comparisons, but it’s not the most reliable metric when setting a list price or making an offer. Instead, focus on:

• Comparable Sales: Look at recent sales in the same building or complex to get a sense of true market value.
• Building Amenities: Desirable amenities can add value, even if the price per square foot appears lower.
• HOA Fees and Rules: These can impact affordability and desirability, so consider them when evaluating value.
• Neighborhood Trends: Areas like Willow Glen and North San Jose are seeing rising demand. These trends can influence overall pricing far more than square footage alone.

   Looking to buy or sell a condo or townhouse in San Jose? Understanding the real value of a property goes beyond price per square foot. It’s about understanding what makes each unit unique in the competitive Silicon Valley market.

   Stay tuned for more insights into the San Jose condo and townhouse market, including tips on navigating negotiations and strategies for buying in high-demand areas like Santana Row and Downtown San Jose!