After regressing to tables last week, this week I tracked average square footage of Manhattan co-op and condo apartments over the past ten years on a quarterly basis and then added a linear trend line for each. These two macro markets showed a few patterns in square footage I thought were kind of interesting.
Converging: The size gap between co-ops and condos has generally declined over the past 10 years. Condos have been decreasing in size as co-ops have been increasing. Interestingly, co-ops are rising faster in size than condos are falling, at least for now.
Volatility: The average condo size varies more from quarter to quarter. This is likely due to the impact of new developments on the overall average square footage for a given period. In other words, it largely depends on what group of buildings begin to close in each period. The bulk closing of a new development in a short time span influences the overall square footage. Since new development sales usually represent 20% to 40% of condo sales, it has the ability to significantly influence the results in each quarter.
Direction: Condos have been getting smaller as developers seek out the "sweet" spot. Sticker shock can be tempered by developers by reducing their sizes. Before the NASDAQ price correction in 2000, the dotcom boom influenced the significant expansion in condo average square footage. Since that period, overall condo size has declined. In contrast, co-op sizes are rising yet this type of housing stock is basically static since new development is nearly all condo. It suggests the greater co-op activity at the upper end of the price range is skewing the overall size upward.
· Manhattan Neighborhood Change in Price Per Square Foot [Miller Samuel]