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It is more complicated, like I said. It's not a linear valuation, meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neigh
by Clubber 9y ago
It is more complicated, like I said. It's not a linear valuation, meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neighborhood, but it will be lower and push down the average home value.
If houses in a neighborhood were sold strictly on a price / sq. foot basis, there probably wouldn't be much devaluation, in fact you would probably get an increase valuation based the costs incurred to just build a house without regards to sq footage. (meaning the first $125K is the first 1000 sq feet and the 2nd 1000 is only $75K more.
- smsm42 9y ago> meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neighborhood, but it will be lower and push down the average home value. Average home value is largely meaningless if you are averaging substantially different houses. It only has meaning if we're talking about heterogeneous neighborhood or about something like a large area in rough comparison with another large area. Well, maybe not entirely meaningless as you still can get rough indicator of "price level", but useless in comparing the effect of this or that measure. It's like the reverse of the joke when Bill Gates walks into a pub and average income of everybody in the pub doubles. May be technically true but not a useful measure of anything.
- TheCoelacanth 9y ago> Bill Gates walks into a pub and average income of everybody in the pub doubles That must be a really big pub or have started out with some very rich people in it to have only doubled.
- smsm42 9y agoWell he wouldn't go to just any pub...
- infinite8s 9y agoIf Bill Gates walks into a bar the average person in the bar is now a billionaire (assuming about a moderately sized bar with 50 people in it).