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Three Cents Worth: How Big Is Your Unit?

[Today, Jonathan Miller returns to break down the market for us in graphic detail. This week's entry explores the average square footage of Manhattan apartments. Click on the image to exand.]

After a long weekend and a lot of sleeping-in [read, lounging on a well-appointed beach chair -ed], I was still thinking about, well, sleeping (aka bedrooms). This week I decided to look at the average square feet of co-ops and condos broken down by the number of bedrooms.

In the main chart, the data is comprised of re-sale and new development sales that closed in 2Q 2006. The units are broken down by their number of bedrooms and compared on the basis of co-op and condo ownership. Condos were larger than co-ops in each size category across the board, although I would have expected 2-bedroom co-ops to be larger. I keep thinking of all the smallish 2-bedroom condos that have come online over the past 20 years and all those large pre-war classic-six 2-bedroom co-ops. On further review, those types of units were not enough to make the results consistent with my expectations.

The inset chart measures the percent change in average square footage for each unit size category as compared to the same period last year. This chart shows the shrinking square footage of larger units over the year while entry-level units were relatively unchanged. Condo units in new developments (which generally favor 2-bedroom or larger units) saw the greatest change suggesting a shift in offerings by developers. This suggests that smaller units in new developments are being offered in order to slip under the price points of a more price sensitive market. Finding that allusive sweet spot is more important than ever for developers.

However, this trend isn't only seen in condos. Co-ops, which are nearly all re-sales, saw a similar trend but only in 3-bedroom and 4-bedroom units. Perhaps affordability is tempering the size of units that actually sell in each size category. Admittedly thats a stretch and I am open to any theories on why. Perhaps another 3-day weekend would help.
· Manhattan Average Square Footage by Unit Size [Miller Samuel]