The value of a floor: valuing floor level in high‐rise condominiums in San Diego

Abstract

Purpose-This paper aims to analyze the effect of floor level on condominium prices in San Diego, California. The authors determine whether "higher-floor premiums" exist in the condominium market for a large California city. Further, they investigate how the floor premium varies throughout a building, particularly whether it is quadratic and whether there is a "penthouse premium" for top-floor units. Design/methodology/approach-The paper utilizes a data set of 2,395 condominium sales occurring in San Diego between 2006 and the second quarter of 2011. Using hedonic pricing analysis, the authors model the housing price as a function of condominium, building and neighborhood characteristics. Findings-The results suggest that there is a higher-floor premium for condominiums in San Diego. Specifically, an increase in the floor level is associated with about a 2.2 percent increase in sale price. The higher-floor premium appears to be quadratic in price, suggesting that price increases at a decreasing rate above the mean floor level. The authors also find evidence for a penthouse premium, though this effect disappears once "floor" is controlled for in the model. Originality/value-There has been little direct research on the floor effect in condominium prices. The studies that have used floor level as an explanatory variable have been predominately in Southeast Asia. The results suggest that the floor effect is more complex than previously modeled.

Value of urban views in a bay city: Hedonic analysis with the spatial multilevel additive regression (SMAR) model

“…These factors would include fresh air (Kei, Wing, Yung, & Chung, 2006), better ventilation, much sunlight, better security, and lower humidity, which is important in Japan. Furthermore, high-rise units are often penthouse units, which have a positive premium (Conroy, Narwold, & Sandy, 2013). Thus, the positive sign of "Floor" is reasonable.…”

Predikcija Cene Nekretnina Na Osnovu Podataka Iz Oglasa

“…U nekim oglasima nije naveden sprat na kojem se stan nalazi. U ranijim radovima je ustanovljeno da sprat ima značajan uticaj na cenu stana [7], pa su oglasi bez navedenog sprata uklonjeni iz skupa podataka. Podaci o datumu objavljivanja i ažuriranja oglasa, kao i tipu oglašavača su uklonjeni iz skupa podataka, jer su vezani za sam oglas, a ne za nekretninu, pa ne bi trebalo da utiču na njenu cenu.…”

Towards a Hedonic Pricing Method for the Bucharest Private Housing Market

“…Conroy and Milosch (2011) noticed that 100 square foot rise in structure is tied with a 2.29% higher price. Conroy et al (2013) proved that 7.5 percent increase of price occur with every 100-foot rise in square footage. Kim et al (2015) revealed that apartment prices augment as size is near 134.5 square metres and then drops.…”

“…Conroy and Milosch (2011) revealed that an extra bathroom is related with a 4.3% upper sales price and Ibeas et al (2012) documented that the presence of an additional bathroom rises prices by 12%, having a garage lift prices by 10% and if the building is equipped with a lift the price rise by 20%. Conroy et al (2013) found that a supplemental bathroom generates a 5.3 percent lift in sales price, while an extra bedroom increases price by 9.9 percent. Also, Zhang and Yi (2017) contended that house price rises by 9.77% in case of one more bedroom and by 14.47% in case of one more living room.…”