I live in a single family home, but I have sold a lot condos. And despite the fact that each provides us a way and place to live, they are really two different animals.
Without going into too much depth about the differences in ownership and financing (which are significant), the main difference is in how they are valued — especially within their own building.
The Ginter Place Condominium project offers city skyline views from the south east conner above the 7th floor. Factoids such as that one are important in correctly valuing each individual condo unit.
Location. Location. Location.
One of the biggest challenges in valuing a condo is in valuing the view it offers and the location within the building. Think about your last hotel stay — while you pay the same basic rate as everyone for the type of room (king vs. queen, smoking vs. non-smoking), the location of the room within the hotel can impact your stay dramatically. Next to the elevator, on the third floor above the trash bins, adjacent to the ice maker or fire exit… all of these impact your stay, right? And when you get the bonus of staying on the 18th floor on the river side where the sun sets, then you feel like you won the lottery.
The most valuable corner in the Vistas is generally considered the NW corner, with the SW corner coming in at a close second. You can tell the location within the building by the unit number.
It makes a difference.
But when you are buying or selling a condo, pricing for each unit obviously varies (unlike a hotel) and it can be extremely difficult to assign value to both the positive and negative elements that impact each units value.
The Gotham Condos require a variance from Fannie Mae due to the percentage of commercial space in the building. The correct agents knows how to navigate this issue and its impact on values.
So how do you do it?
It is part science, part art, and part experience.
The Science — We like to use what we call ‘ratio pricing’, where we look at how prices on the different sides, different floors, and different views all relate. Typically, you can get a sense of the premiums that each element provides if you understand how to read the data.
The Reserve project is comprised of two buildings, one of which has its taxes abated, while the other does not.
The Art — As my buddy who sells homes in the Outer Banks likes to say, a view is worth whatever someone is willing to pay for it. Again, when you know what to look for in the numbers, you gain a sense of what the difference might be from the east side, the west side, the river side, or the city side.
The Experience — Having been the lead sales agent on close to 20 different projects, we have a ton of applicable experience on what the various condos offer. Finishes, parking, dues, financing, management, and common amenities all make a difference. Knowing that the Emrick Flats only offers 14 garage parking spaces and 6 lot parking spaces for the 25 units, and that only 5 units have private decks is extremely important when interpreting comparable sales.
The Decatur Condo is only 4 units, and thus the way it is financed is different than the way a 5 unit or more condo is. Furthermore, each unit is extremely unique, making comparable sales quite tricky.
While all home types require expertise to truly advocate for clients, no where is that more important than in condo sales. The variables are numerous and MLS data does not do a good job of conveying the differences.
As agents, we all have specialties, and one of ours is condos. Let us help you understand the market.