All buyers just like you are looking for the best deal! Cheaper doesn’t always mean better a better deal and that is where price per square foot comes in. For example, let’s compare these 2-bedroom apartments.
- Apartment A is priced at $2.3 million and has 1,300 square feet
- Apartment B is priced at $2.4 million and has 1200 square feet
Just by looking at it you might assume that Apartment A is the better deal. However, after calculating the dollar per square foot you will think differently.
- Apartment A price PSF = $2.3M / 1,300 square feet = $1,769 per square foot
- Apartment B price PSF = $2.4M/ 1,200 square feet = $2,000 per square foot
Apartment B is $231 per square feet more than Apartment A so Apartment A is the better value.
However, knowing the true square footage of an apartment is tricky! Why? Because there is no uniform way of measuring square footage of condos, co-ops and townhouses in NYC. Demands for uniform standards are getting stronger since the market has softened and price- conscious buyers are increasingly are looking carefully at value and the dollar per square foot.
There can be discrepancies in the amount of usable square footage stated in the offering plan. A difference of 5% to 10% is considered non-material according to experts.
Overstating the square footage of a new condo is just one-way developers and marketers may try to make it look like you are getting a better deal. What you need to know is that offering plans give buyers full disclosure that units are sold based on gross square footage not the usable square footage. By the way the gross square footage is the more common standard in NYC.
Here is something important that you need to know! If you are buying into a high-rise glass curtain wall building the exterior of the building and the thickness of the wall is minimal so the difference in gross square footage versus usable space is not significant. However, if you are buying in a pre-war retrofitted building with 18-inch walls they become part of the space you are buying and make more of a difference when it comes to gross square feet versus usable square feet.
Jonathan Miller a top appraiser who writes all of Douglas Elliman’s market reports says that if you had an appraiser, a broker and an architect measure an apartment they would all come up with different numbers.
In general co-ops are measured from one inside wall to the opposite inside wall. Condos are supposed to be measured the same way, but developers have discovered a certain amount of leeway via the Martin Act. Developers are only obligated to disclose their method of measuring units. How they choose to measure them is up to them.
Co-ops are at a disadvantage because they rely on room count versus square footage downplaying their relative value compared to condos.
There needs to be a change towards a uniform measure and that should be gross square footage. This is easy to measure. Co-ops and condos would be measured in the same way. I believe that someday in the future we will get uniform ways to measure square footage.