I am often asked by sellers to help them price their condos for resale. This is often a tricky task, as there are a variety of factors that go into pricing a condo. The job is sometimes less difficult if there is a standard condo unit in, say, a high rise building. Generally speaking, most of the newer high rise buildings have a similar floor plan from floor to floor- hence, unit 604 is likely identical to 704, as it is to, say, unit 1404.
The three variables which play a role in the differences in resale prices are floor height, interior condition, and of course, current market conditions. So pricing a newer high rise Philadelphia condo unit is fairly simple. We can look at past sales for similar units within that building. Generally, the higher the floor, the higher the sale price. Newly upgraded units sell for more than original condition units, and the trends in the current market play a hand in the final resale price.
In a low rise or mid rise building, where you do not have much uniformity in unit size, shape, or design, the task of finding a good value becomes much more difficult for units in the same building. For instance, prices in a low or mid rise might be much more affected by floor height. A third floor walk up is going to be harder to sell than a second floor unit. And often times, a first floor unit is more difficult to resell than a second floor unit. Value in these buildings is greatly swayed by the presence (or lack) of an elevator. Also, ceiling height can vary within such units, as can the amount of light certain units receive throughout the day. Lastly, the size of the unit can affect the dollar per square foot resale price. It is much easier, in my opinion, to get a very high dollar per square foot for a small unit, say 400 sq. ft., than it is to get that same high dollar per square foot for a 4000 sf unit. That is a topic in and of itself.
When speaking of similar buildings in a similar location, price can be difficult to peg as well. I generally look for things like the condition of the building’s common elements and façade, exterior windows, hallway paint and carpet, elevator upkeep, and generally upkeep of common elements like a roof deck, or other grounds. Also affecting resale price from building to building would be the amount of reserves that a building has in its possession (aka: the rainy day fund). Also, the owner occupancy ratio in a building, which generally reflects on the condition of the common elements, plays a role in resale price. A building full of tenants is generally less desirable than a building fully occupied by owners. Owners have a tendency to better keep an eye on elements needing attention, and have a better sense of pride in ownership. They have a tendency to replace light bulbs, sweep hallways, etc. than say a renter might.
I certainly welcome any comments, questions, or concerns brought on by my thoughts.
Mark Wade
www.CenterCityCondos.com
BHHS Fox and Roach REALTORS®
530 Walnut St. #480, Philadelphia, PA 19106