Boston real estate agents love to talk about the price-per-square foot when comparing Boston luxury condos for property values. There’s also a tendency to reference this type of information when making a decision about how much to submit an offer to purchase.
Here’s the scoop, be careful when using price-per-square foot as a reliable data point, because it has its flaws.
The bottom line, there’s no standardized square footage source, square footage quoted on most Boston real estate websites (yes, including mine) are drawn from MLS (Multiple Listing Service), which base there information on either tax records or past seller appraisals.
It’s no secret that tax records can be inaccurate and outdated. The Assessor-Office has an antiquated computer system. Throw in the fact that our tax records for older condo buildngs go back to the 1980’s. Even if sellers make an honest effort to update their own tax record through city channels—for example, if they’ve added a legal bedroom and bath—the square footage they’re adding isn’t based on one standard source.
Equally important is the fact that Boston housing inventory varies, unwarranted, or “illegal” rooms are those completed without permits, and those spaces are not recognized as part of the overall square footage.
Past appraisals could be accurate, but I’ve seen cases where there are two or three appraisals on hand that have all had different square footage counts. And as you might expect, Boston sellers and agents typically reference the highest number. As one agent recently commented to me, “The square footage sometimes grows over time.” She mentioned one property in particular that had changed hands three times over a ten-year period, and each time, the square footage increased in the MLS.
Square footage is strongly referenced in new-construction condo developments, because buyers are paying well over $1,000/square foot for Boston luxury condos. However, there have been cases when buyers discovered that the square footage quoted for a particular unit was less than the actual size. And when you’re paying $1,000/square foot or more, that can make a big difference.
So if you’re comparing values by price-per-square-foot, do so with a grain of salt. I would also recommend for about $100.00 we can provide you with floors plans where you are present with the contractor to verify the aquare footage and use it as a contingency in your offer. This litte tip can save you thousands or dollars.
Updated: 1st Quarter 2018