Here's a link to a blog I wrote on the same subject: http://www.trulia.com/blog/don_tepper/2010/07/price_per_squa
Hope that helps.
First of all, this would include 10,000 sqft mansions and 700 sqft hovels. It would include regular sales as well as distressed property. Shortsales and REOs.
It would include turn-key properties and fixers.
Secondly; it doesn't take into consideration how long the property was on the market.
Thirdly, we don't know how distressed and desperate the Sellers were.
Fourthly, we don't know what extra things the house had, like a pool, extra large lot, out-buildings, etc.
Also, we don't know if was part of an HOA, or what concessions the Seller or the Buyer made.
I have seen houses sell for $65/sqft and also $450/sqft; how can you average those numbers?
Good luck and may God bless