Price difference per floor?

The rule of thumb regarding the price difference in Manhattan. (# of floors + asking price) divided by # of floors = price difference per floor

Inoeverything, your math doesn't make sense.

For example:
# of floors = 14
asking price = $1,500,000

According to your math, (14 + 1,500,000) / 14 = 107,144
That doesn't look right.

I think inoeverything is being sarcastic....it doesn't always work out in real life with math for price differences of a certain layout based on just the floor level. What if the person on the 10th floor renovated his unit and put in $1 million in renovations you might have a case where this can ask and eventually go for more than the same layout on the 11th or 15th floor etc.

There is no widely accepted rule of thumb and anyone who tells you otherwise is selling you something. I've heard $5000/fl. to $10,000/fl, but never seen this borne out in a single building's comparables. It is merely a factor to consider when evaluating comparables and determining what you believe the value of a unit is to you. Trying to shoehorn this into a formula will not serve you well.

ok thanks. So hard to figure whether or not to buy.

There are two, not exactly rules of thumb, but buyer's mottoes that might help:

1) with a "view" building, you want to stretch yourself financially to buy the best view you can. Since "view" buildings are usually new construction condos, this probably doesn't apply here. But if your building attracts people because it's a tower, pony up to go as high as you can go, even at the expense of layout.

2) with NYC buildings, you generally want to pay for a worse apartment in a better building rather than a better apartment in a worse building. This is really just an extension of the old real estate adage that you want to buy "the worst house on the best block." You might cap your upside a little if you are in the lowest, darkest, noisiest apartment in the building -- but in the last downturn (late 80s/early 90s) lousy apartments in good buildings held their value relatively well.

ali r.
{downtown broker}

I'd have to agree with the last post. Seems like sound advice. No silly formula--just decent concepts to keep in mind.

front_porch, great advice. From an investment perspective, would you also go for the view at the expense of size in a "view" building? E.g. would you give up a 2bed 2bath on the 9th floor with average view for a 1bed 1bath on the 30th floor with spectacular view at the same price? Assuming there are also other factors attracting people to the building: concierge, roofdeck, location, etc.

What exactly qualifies as a "good building"? Doorman/concierge/elevator, certainly. But besides the obvious, are there other telltale signs?

A good building is one that looks obviously well-maintained, with nice updated public areas and lobby, nice elevator cabs, and at least basic amenities such as pleasant laundry rooms, and clean garbage disposal rooms on each floor. A good building is in a good location--not between a crack house and a soup kitchen. While not dispositive, a doorman is good, and a live-in super and adequate staffing are generally good signs. The people you pass in the lobby and halls should look like a crowd you would feel okay with when leaving your door unlocked and running out to the store for some milk. A good building has solid, conservative, unremarkable financials. It does not have signs on the garbage chute that say "DANGER, rodentcide present--protect pets and children," or security notices near the mailboxes that beg tenants to be sure the vestibule door shuts behind them because of recent thefts and homicides in the building, or contains bad smells.

The OP is too vague. It doesn't only matter what floor you're on, but the light and views you have. One floor can make a massive difference in some cases, while ten floors does not in others.

Exactly, Malreaux. If floor 4 has you looking into a wall or the apartment across the street, but floor 6 has views over the rooftops of Greenwich Village and open sky, how can you give a per/floor formula that would apply to the Chelsea Stratus floor 24 versus floor 26?

my question was assuming you're looking into the garden and the views are likely the same (light would differ), then is there a formula?

I've asked this same question and I got similar answers. A couple brokers chimed in and suggested they usually tack on a few more thousand per floor, but that logic doesn't play out if you apply it to starter studios all the way to luxury penthouses. If you look at new developments, they have to come up with a formula, and from the ones I did the math on it looked like it was the same couple percent increase per floor, regardless of light or views. For resales you're going to have to look at comps, if there are any, then make your best guess.

masterd--

I find it tough to do "hypothetical" pricing since I price apartments for a living and feel pretty sure that there are about five subtleties I can't see here -- but hopefully your agent can see them and guide you. (Yes, you should have an agent, especially since the sponsor is probably not going to give you a pricing concession for not having one.)

My impulse, not seeing them, is to steer you to the high-floor one.

But when I tried to take a look at recent market data to justify my gut instinct, the low-floor two seemed like a better buy.

My quick hit was to take a look at sold prices from the Orion -- 350 W. 42nd -- because it is a gigantor new condo building so it gives us a lot of data points.

A sale of a ninth floor 2/2 went out at $1,030 a square foot, while a contemporaneous sale of a 31st floor view 1/1 went out $100 a square foot higher.

These are both data points from 1/2006, a pretty go-go time for NYC and for that building.

Data points on roughly equivalent apartments from later in 2007, as arguably the market started to slow down, show that both kinds of apartments had appreciated, but a lower-floor 2-bedroom was now worth slightly more in terms of ppsf pricing than a high-floor one.

That said, the high-floor one sold faster, and there's a value too to an investor to having more liquidity.

And the lower floor 2-bedroom sale was from June, and the high-floor one-bedroom was three months later, so maybe the 1-bedroom was already getting hit by market softness.

Now you see why this real estate stuff is an art and how it provides full-time jobs for people.

The questions you should to look at with your agent are:

* what kind of future inventory is coming online? (arguably the Orion is affected by buildings that came after it, such as the Platinum, and to a lesser extent, the Atelier)

* what is your time-frame for holding? to what extent are you chasing absolute price and to what extent are you chasing liquidity?

* who is your future buyer and what is his/her/their future income curve going to look like? (i.e. is your building in a location near law firms, or near investment banks? what will future economic cycles do to those types of jobs?

good luck!

ali r.
{downtown broker}

ali r.
{downtown broker}

ali, thanks for your helpful insight. I agree that there is no exact formula for comparing apartments, that's why I'm interested in your opinion. In your analysis, you used price/sqft for comparison. The apartments I had in mind were actually listed with the same asking price, not pps. The 2/2 had a pps of $1120 and the the 1/1 had a pps of $1630. That's $500/sqft difference. How high and how bright can a 1/1 be to justify this premium?

Masterd -- honestly, I would have to see location and floorplans. I feel like you're asking me if the red dress or the black dress looks better on you.

ali r.
{downtown broker}

ali, that's fair. I'm not trying to make a buying decision right now. Since you made the statement that one should "pony up to go as high as you can go," I'm curious to know where you would draw the line. There's a price for everything and I'm not sure if one should pay whatever the developers ask for. One example I recall are the following listings in the Chelsea Stratus from last year. Both were listed and went in-contract around the same time.
http://www.streeteasy.com/nyc/sale/86026-condo-101-west-24th-street-chelsea-new-york
http://www.streeteasy.com/nyc/sale/94486-condo-101-west-24th-street-chelsea-new-york
One is a south-facing 1-bed on a very high floor with amazing views (I'm sure) and the other is a 2bed with north and west exposures, which I believe is on a lower floor but not lower than 9th and should have good light and average view. My question was, as a pure investment, which do you think was a better buy.