Price Per Square Foot Might Not be the Best Gauge for Value, Experts Say
MANHATTAN — Take a tape measure on your next open house visit.
Though popular real estate websites such as Trulia, Zillow and StreetEasy often include an apartment’s price per square foot, many brokers warn that the art of calculation is imprecise at best.
Some listings might use closets, hallways — inside or outside the unit — and even elevator shafts in their measurements. Others might just include usable space.
Then there are questions about how to include terraces or outdoor areas.
There are no rules that dictate how to measure square footage, experts told DNAinfo New York. Because of that, some brokers discourage buyers from relying on the price-per-square-foot figure to gauge whether they’re getting a good deal.
“Buyers and sellers are always asking about per square foot,” said Dan Bamberger, of CitiHabitats. “It’s the most common way people try to make a justified analysis of how much they should be paying for an apartment.”
“I hate to put it like this, but it’s really more trickery than anything else.”
Usually when an apartment is listed, brokers hire someone with a tape measure — rarely a licensed architect — to create a floor plan, explained Bamberger, who recently wrote about the murkiness of square feet in a newsletter he sends to clients.
For his piece, he randomly selected four Greenwich Village apartments currently on the market and found that the floor plan, on average, was nearly 44 percent smaller than the listed square footage.
Bamberger also found discrepancies of nearly 12 percent in square footage between the same unit listed at two different times or similar apartments on different floors of the same building. Yet in many cases, buyers would pay a premium based on price per square foot, he said.
There are few references for homebuyers to check apartments’ square feet. Co-ops — which represent three-quarters of Manhattan’s housing stock — have no public record, and measurements for condos are included in their offering plans, explained Jonathan Miller, president of the Miller Samuel appraisal firm.
Many real estate experts say that calculating square feet of apartments is an inexact science. There’s no public rec…
“If you put two licensed architects in a room, you would not get identical measurements,” he said. “You would get a close measurement, but there isn’t a level of precision available.”
Miller said measurements in listings tend to be between 5 and 10 percent higher than the actual size.
“A 2,000-square-foot apartment might be closer to 1,800,” Miller said. “That doesn’t mean that apartment in that building sold for 10 percent more than it was worth.
“I think there’s an expectation of precision that doesn’t exist. But it’s not like [the space] was hidden from you when you bought. It’s just another rating for the apartment.”
A lot of brokerage firms don’t include square footage in their listings or are cautious about the numbers being approximate, because they’re worried about being sued, he said.
Case in point: David Wilkenfeld, founder of PromGirl.com, a major formal dress e-tailer, agreed to pay $13 million for a penthouse at 200 Chambers St. in TriBeCa that was listed at 4,700 square feet.
But only after he agreed to the deal, he learned that the condo’s offering plan listed the unit as having 4,548 square feet, according to a lawsuit he filed against the broker in March, essentially seeking a $2.08 million refund based on the smaller size.
The lawsuit claimed the 2012 sale of the condo was “hurried” by email during the “traumatic period of Hurricane Sandy and its aftermath in New York City.” The case was dismissed in April.
Especially in today’s market, with its lack of inventory, using such questionable numbers to base home-buying decisions may not make for the most solid foundation, the experts agreed.
When he works with sellers, Bamberger tries not to disclose the square footage since it could present issues or disputes down the road, he said.
When he works with buyers he encourages them to assess the apartment on its merits rather than on the listed square footage.
“You have to make a subjective opinion on what an apartment is worth,” Bamberger said.