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I beleive pricing a condo (CMA) is as much of an art as a science. While square footage is an important factor there are attributes and variables that can add to value that is not always reflected in the square footage.
2 identical condo units may have the same layout and identical square footage but one faces the back of another building and the other has unobstructed park views. The park view unit may be worth 50% more.
A higher floor is worth more except in a walk-up townhouse. A high-rise may have set backs on certain floors with either higher or lower ceiling height. The floors with higher ceilings are worth more. Condition can affect value.
I often go back to the original offering plan and use the same premium percent for attributes and amenities that the original developer allocated to each unit but adjust based on today's prices and the percent prices have risen since the first offering.
For example. A condo built in 1990 at the time had a $1,000 premium for each higher floor. Today that may be around $15,000 or more per floor.
Knowledge of building and the different lines and layouts in the building is important.
Ron and Alexandra Seigel
Jeff Dowler, CRS
The Law of Averages works for me. It's a CMA not an appraisal.
Thomas J. Nelson, REAL...
La Jolla, CA
Patricia Kennedy - you are right, the bigger the unit, the lower $/sq ft.
I add/subtract about 30% of the $/sq ft amount for the difference in most cases.
So if the higher price is $300/sq ft, the difference of the sq ft is $90/sq ft.
Thomas J. Nelson, REAL...
La Jolla, CA
As Mitchell J Hall mentioned. Valuations, particularly for condos can vary in the $/SF factor from many subjective influences, particularly location. Here in Sarasota, there are cewrtain stretches of beach that are demanding more $ and they can be within eye-shot of each other.
Boy, this ? is making my head hurt this morning.
Knowledge of the building is key. Are the comps rehabbed and yours not or vice versa? same for the baths! Then probably still a SWAG (scientific wild ass guess) on the adjusment percentage, likely between 10 and 30% depending on the size of the unit.
Mitchell J Hall has a very thoughtful answer. Upgrades(or lack thereof), location within the building, view/orientation and emotional appeal are some of the factors I use.
As many have answered -- it's more art than science.
We have buildings like you do in our area. But issues like end unit, view, and location in the complex add value to similar SF units. Mitchell J Hall certainly gives a thorough answer and he knows NYC
What Mitchell J Hall said. A
I like what Mitchell Hall had to say.
It varies. Not easy if there aren't enough comps. There are some condos where I needed to factor in quality of materials and upgrades, so even though they are same SF, their values are different. Parking, storage, balcony, and view are also a factor in some buildings. I've also had some that were bought at Pre Construction Prices which can also throw off the SF price.
Sorry, I don't look at price per square foot. It's not a valid factor in my market.
I defer to Mitchell Hall for his answer.
Maybe that particular stat is not the most important one for comps, given the variables you describe.
I can understand using cost per s.f. when dealing with new contruction, and that varies with the cost of the land if that's included in the equation.... but to use that with a resale condo is not ideal!! there's depreciation for age and upgrades....
I price condos all the time and use a simple comparison based on past sales, existing units on the market, floor level (big issue if it's on the gulf), waterfront etc.
IMO, there are too many varaibles on pricing condos to say "this is the formula I use" - but if you have one, I'd be interested to hear it.
In my area, bigger units sometimes increase the PPSF and some of our units have more than 1 kitchen and more than one floor
Sorry I wasn't more help
Will read solutions, too much to contemplate this early.
Patricia Kennedy I believe you can take the cost approach to appraisal. Once the cost is determined, you can adjust for location. Talk to an appraiser or some condo builders.
I apply a .009 inversion /400 sf difference.
On condos, even if the same exact SF, the price could vary greatly. One can have gold-plated walls, and the other have grass covered walls. Makes for a real difference in cost-per-SF.
On condos, when doing comps you really have to drill down on the finishes, upgrades, etc. down to the last detail.
Sometimes a similar looking apple, may actually be a kumquat.
I would determine the price per SF in that condo complex and then also add for or deduct for kitchen, baths or bedroom counts or sizes.
parked and reading...
This will be a good blog topic when you figure out the answer.