If you have ever talked to a real estate agent about buying a home, one of the exercises they will do is "pull comps" before recommending to write an offer. Pulling comps (comparables) means to find recently sold, similar size homes in the same neighborhood or area. They typically do this by running searches of homes sold recently on the MLS. Why do you do this?
1) Most likely you will be getting a loan and the bank will require an appraisal. The appraiser will also "pull comps" and determine the value of the home.
2) As a buyer you want to make sure you are paying market value.
For this practice to be effective, the Realtor, appraiser and consumer must be making accurate comparisons.
When evaluating & comparing homes and looking at Price/sf, I recommend looking at the photos on the MLS Listing. Also reading the notes in the listing to find out what is included in the price. If possible have your real estate agent pull comps of other homes that builder has built in the area.
Trying to compare a remodel to new construction is many times like comparing apples to oranges. But you must be careful not to consider all new construction as “simply apples.” For instance, organic apples may look similar than a non-organic apple. However they cost more because they have a higher standard of production.
The same is true when comparing new construction homes.
When comparing new construction homes some builders do not include refrigerators or window treatments. Some don't put trim around windows. I am not saying that is wrong. Yet if a newly built home has faux wood blinds, extensive trim/molding, extra built-ins or closets with wood shelving instead of wire racks and other special design features there is a “higher standard of production” with that home. Because of these extra features a higher price per square foot is going to be paid.
Two homes we built last year had some high end modern features such as stained concrete floors, stained wood fireplace mantle wall, quartz countertops, built-ins in the master closet & extra storage and counter space in the laundry room. Our home was listed at $212/sf. Other new construction comps in the neighborhood were in the $190s/sf. However we sold both homes at asking price. Why? Because there was more value to them even though it was higher price/sf.
So, is price/sf important? Yes, just make sure you dig a little deeper and look at the quality of the home.