Look Deeper Than Price Per Square Foot

November 8, 2023

In 1986 Yugo America began selling the Yugo GV (“Great Value”) entry-level hatchback for $3,990 (not adjusted for inflation). Assembled in Serbia, the car was supposed to be an affordable, reliable, bare-bones car for American buyers. 

But now we all know how that turned out. While the Yugo was certainly affordable; it was noisy, underpowered, and unreliable.

1986 also saw the release of another new brand and model in the US – the Acura Integra. This car was on the other end of the spectrum. One of the first Japanese luxury brands, it took Honda’s reputation for reliability and added upscale luxury features. Beginning at $9,859 (again, not adjusted for inflation), it cost more than the Yugo GV, but it was everything the Yugo wasn’t – reliable, luxurious, and fun to drive. 

Comparing these two cars, we recognize that these are two very different vehicles serving two very different needs. The Yugo was stripped down to maximize affordability, and the Acura cost more because it included many features that added comfort. And we understand that the prices reflect these differences.

Now, in housing it’s popular to measure everything by Price Per Square Foot. Which is an okay place to start, but it leaves a lot to be desired when we look at the comfort and livability of homes. 

Consider if we used the same measurement with automobiles. The 1987 Yugo GV had a total length of 137.2 inches. The 1987 Acura Integra had a base length of 168.5 inches. So, when measured by length, the Yugo cost $29.08 per inch. The Acura cost $58.51 per inch. If we looked at these prices like we examine housing prices, we’d conclude that the Acura was ridiculously overpriced since it cost more than TWO TIMES what the Yugo cost (based on length.)

That comparison is obviously made sarcastically. But it’s important to note that we have the same differences in the housing market. There are some homes that try to be as inexpensive as possible. They’re built to serve a specific buyer and they leave out many amenities to keep the price as low as possible. On the other hand, there are homes that include features that contribute to performance (energy efficiency), comfort (air quality and noise reduction), luxury (quality of materials used and thoughtfully added features), and reliability (again, focused on quality materials and mechanical components).

So while price per square foot is an okay place to start, make sure you dig deeper to see if any price differences are justified by the quality of the home you’re buying.

If you want to see what makes Riverwood Homes different, you can see how our homes protect your Health (while you’re there see what our Indoor AirPLUS certification means) while being Energy Efficient (we’re Zero Energy Ready Home partners and Energy Star partners). 

All that in a truly beautiful home.

Please reach out if you’d like to learn more!

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