Manhattan Real Estate: The Problem of Square-Footage

Square footage- a standard part of the advertisement for any real estate, right? We’ve all looked at price-per-square-foot as a way to gauge value and price changes, especially during the last few years when the market has shot both up and down. ? But how often is it accurate or even useful?

As Bill Staniford,  PropertyShark CEO, says: “When it comes to square footage in New York City, it’s the Wild West. It’s measured in so many different ways.” He goes on to say that using price-per-square-foot as a value measure is “totally pointless.”

The Real Deal dug into this and came up with some interesting conclusions. Basically, Manhattan apartments are really hard to measure, and that can lead to confusion or deception.

Places like pre-war co-ops have hard-to-measure turrets, curving hallways or oddly shaped rooms. And when buildings converted to coops in the 80s, they weren’t required to list the square footage in the offering plan. Condo offerings are required to do this, but developers all measure square footage differently, so comparisons between different properties don’t mean much. And after lawsuits involving square footage, it was just easier and safer to advertise without square footage.

That changed when the real estate boom happened, though. And price-per-square-foot is back to being a market standard piece of information- though now you always see a disclaimer that the square footage is an estimate. This solves the lawsuit problem, though it creates another: exaggerating square footage.

According to Miller, apartments are usually 5-10% smaller than advertised. The Real Deal tells the story of one agent advertising a property at just under 700 square feet and saw an identical unit from the same building, different floor listed at 800 square feet. Estimates and exaggerations also wreak havoc on the appraisal process, especially with out of town appraisers.

So, what do you do if you’re a broker?

Staniford says: “The best thing to do is talk about it as, ‘this space costs x,’ and don’t worry about the square footage.”

(Image Credit: The Real Deal)

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