Yesterday’s article in The New York Times was a reaffirmation of something people have been saying for years. It is truly perplexing to me that this measure of quantifying property value is still quoted and misquoted on a daily basis and has become the benchmark amongst “professionals” in the appraisal industry. Some “professionals” have actually made a profession out of doing this.
When the first report of this type came out 15 years ago, I contended that the measurement of a home is one of the most misleading ways to quantify the value of it. I say this as a broker who has walked through thousands of homes with buyers after seeing the things that make a difference to them (not as an appraiser). Clearly everyone wants a larger apartment, but there are things more important in a Buyer’s mind:
The view
The location
The bedroom count
The amenities
The condition
The volume of the space
And yes…the “feeling” of the space!
This hasn’t stopped some appraisers (turned analysts, turned investors) from continuing to use size as the determining factor in value.
Absurd!
(This is why the CORE Realtime Report doesn’t include square feet as a barometer of value).
Perhaps it is our need as an industry (or the desire of the media) to assimilate Real Estate to Wall Street.
But the two are fundamentally different.