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Three Cents Worth: Less Is More?

[This week, our chartman Jonathan Miller plots a big old regression to see if the old saw that big apartments cost more is really true. Click on the image to expand.]

This week I took all 2,441 transactions I collected in the fourth quarter of 2006 that were used for the Manhattan Market Overview and plotted them as a regression line, simply to show the trend that bigger apartments (as measured by number of rooms) generally cost more on a price per square foot basis. Each blue dot (and they are blurred together because there are so many) shows sales that closed in 4Q 2006. One thing thats pretty clear here is that there are many price outliers.

While the general trend has held true for many years, we are definitely seeing more and more exceptions to this at the lower end of the size spectrum. For example, in Greenwich Village, East Village and Chelsea are often more expensive than 1-bedroom apartments on a per square foot basis. During tight housing markets, we often see a threshold limit that the price point of a property does not fall below, causing other indicators to be skewed upward like price per square foot.
· Number of Rooms versus Price Per Square Foot [Miller Samuel]