Using PSF to measure the recovery

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
Excellent point Sharon, let me show you some examples. Answer, the only tool at our disposal for coops will be Median Sale Price trends for that very reason. Here is what that chart looks like, using all the data available, which will be the best chart, by best I mean smoothest and most linear. The second chart shows you the Upper East Side coop market median sales price trend - notice how unusable it is and thats a fairly big sector and usually mimics the broader market trend. Clearly you can see its not. Just power of volatility and low sales volume
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David Goldsmith

All Powerful Moderator
Staff member
A foolish overreliance on $/sf is the hobgoblin of small minded thinking about the market. There are many reasons for this, among them ( somewhat random and disconnected)

1) Even in condominiums not all brokers use an "official" square footage. Many years ago we had a unit at 530 West End Ave. I listed it at the square footage in the Offering Plan. Another broker listed a similar (but smaller) unit as more square feet. We got an offer from a buyer which was low because they saw the other unit and "it was bigger so ours was worth less." No one who saw the two units would think it was larger. It wasn't larger in the Offering Plan. The only place it was larger was in the lie told by the listing broker. But that's the number which gets used for these reports. It's not totally uncommon to see listings with more square footage than prior listings of the same unit.

2) Even in condominiums there is no totally consistent measure of actual square footage of units. A few are the actual interior square footage of the unit. Some include the exterior walls of the building. Some include building staircases outside the unit. Many include the unit's pro-rata share of common elements (and you can imagine what that adds up to in buildings bragging about 100,000 square feet of "amenity spaces").

3) There are units selling at $600/sf and units selling at $6,000/sf. Variations in "average" or "median" $/sf are just as likely to represent changes in the mix of what was sold in whatever time period is being examined.

4) All we are hearing about is how blazingly hot the market is, especially in Brooklyn. Right now UrbanDigs Chart Room has price per square foot down 0.3% Month-Over-Month and 5.9% Year-Over-Year for Manhattan and down 4.8% Month-Over-Month and 2.6% Year-Over-Year for Brooklyn. So which is it?
 
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Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
A foolish overreliance on $/sf is the hobgoblin of small minded thinking about the market. There are many reasons for this, among them ( somewhat random and disconnected)

1) Even in condominiums not all brokers use an "official" square footage. Many years ago we had a unit at 530 West End Ave. I listed it at the square footage in the Offering Plan. Another broker listed a similar (but smaller) unit as more square feet. We got an offer from a buyer which was low because they saw the other unit and "it was bigger so ours was worth less." No one who saw the two units would think it was larger. It wasn't larger in the Offering Plan. The only place it was larger was in the lie told by the listing broker. But that's the number which gets used for these reports. It's not totally uncommon to see listings with more square footage than prior listings of the same unit.

2) Even in condominiums there is no totally consistent measure of actual square footage of units. A few are the actual interior square footage of the unit. Some include the exterior walls of the building. Some include building staircases outside the unit. Many include the unit's pro-rata share of common elements (and you can imagine what that adds up to in buildings bragging about 100,000 square feet of "amenity spaces").

3) There are units selling at $600/sf and units selling at $6,000/sf. Variations in "average" or "median" $/sf are just as likely to represent changes in the mix of what was sold in whatever time period is being examined.

4) All we are hearing about is how blazingly hot the market is, especially in Brooklyn. Right now UrbanDigs Chart Room has price per square foot down 0.3% Month-Over-Month and 5.9% Year-Over-Year for Manhattan and down 4.8% Month-Over-Month and 2.6% Year-Over-Year for Brooklyn. So which is it?
Your points on 1 & 2 are interconnected and we can summarize that condo size is not official or standardized. Agree completely, but I would like to think when mixed en masse and looked at as a whole (excluding new dev batch closings that mess with monthly/quarterly trends), broad ppsf is the best tool we have

Your point on #3 is the critical point. Views, renovation, outdoor space (just a few) can all make some units gap up or down or whatever. med sale price is even more exposed on this issue as what types of properties close and when, as you note, can make or break a trend in a misleading way.

I have a different view on point #4. What you are hearing about in regards to 'blazingly hot' is the return of liquidity. The pending sales chart shows this perfectly (below). We are at the peak of that activity in deal vol right now, it just keeps climbing higher, perhaps a wall of worry. It cant be sustainable, but its happening. Price action is lagging by 4-6 months. I do not look at the most recent 2 months of sales data - we added that due to broker demands. We shaded it lighter grey and added a INCOMPLETE note when you hover on it. It will change as data comes in. The DEC and JAN bars are pretty much complete and do show the slight tick up in price action off lows. Even if recent months show a tick down, it shouldnt take away from what is happening right now in the streets. For that we will need to wait 4-5 months, so by then, the question is, are prices higher and accurately reflecting stories of a 'hot' market. I say by July/Aug, the up trend in prices will be clear to see and continue over time.

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