In real estate, not all square footage is created equal. Smaller homes often sell for more per square foot than larger homes because the first square feet - kitchen, living space, and bedrooms - carry more value than the extra footage added later. In San Francisco and Marin, where no two homes age or evolve the same way, understanding this concept helps both buyers and sellers price and evaluate homes more effectively.
Why Smaller Homes Often Cost More Per Square Foot
When you buy a home, the first 1,000 square feet are the most valuable. They give you what you absolutely need: a kitchen, a living room, a bathroom, and at least one bedroom. Every foot is essential.
But as homes get larger, each additional square foot often contributes less. For many buyers, three bedrooms are essential, four bedrooms is the dream, and the fifth bedroom often is fine if it is already there, but they don't want to pay extra for it. A bonus room, wider hallways, or an extra sitting area may increase the total price, but they don’t add the same utility per foot. That’s why a 1,000-square-foot home in Noe Valley might sell for $1,300 per square foot, while a 3,000-square-foot home in the same neighborhood might sell closer to $1,000 per square foot.
The San Francisco & Marin Factor
In many U.S. markets, this relationship between home size and price per square foot is easy to see. But in San Francisco and Marin, it’s complicated by history.
Two homes built by the same contractor in 1925 might look completely different today. One may have been meticulously renovated with high-end finishes, while the other might show decades of deferred maintenance. Even when homes are the same size, the way square footage is used, and the condition it’s in, can make values diverge dramatically.
That means buyers and sellers should think about quality, layout, and function, not just size.
What This Means for Sellers
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Don’t assume buyers will calculate your home’s value only by square footage.
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Highlight how your home uses its square footage: Efficient layouts, natural light, and modern updates make every foot feel bigger.
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Smaller, well-presented homes can command very strong premiums in today’s market.
What This Means for Buyers
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A higher price per square foot doesn’t necessarily mean a home is “overpriced.” Smaller homes naturally come at a premium because every foot matters.
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Instead of focusing solely on $/sq ft, evaluate whether the home meets your lifestyle needs and if the layout maximizes livability.
Final Thoughts
The first square foot is worth more than the last. Understanding this principle can reshape how you think about home values, especially in nuanced markets like San Francisco and Marin. Whether you’re buying or selling, remember: square footage is only one measure of value. What really matters is how those square feet work for you. Sometimes, I can help reimagine how a home is used, and that perspective can make a huge difference in the final price per square foot.
Oliver Burgelman
Broker Associate | Vanguard Properties
DRE #01388135
📞 415-244-5846
🌐 sfresidential.com
Serving San Francisco & Marin County
