The Real Deal New York

Townhouse sales are surging: PHOTOS

June 15, 2012 08:30AM
By Zachary Kussin

Townhouse sales are on the upswing. Between January and May 15 of this year, more single- to three-family Manhattan townhouses have sold than during the same period in the three years prior, The Real Deal has learned. According to data provided by Miller Samuel, 69 townhouse transactions, with a total value of $340.6 million, were completed between January and mid-May. That represents a 43.8 percent increase from the same period in 2011, a 4.5 percent uptick from 2010 and a 76.9 percent rise from 2009.

However, the current number of townhouse sales does not match the numbers seen in Manhattan between 2006 and 2008. From January to mid-May 2006, a total of 71 single- to three-family townhouses closed; in 2007, there were 88 such transactions and in 2008, there were 86. More specifically, according to Jonathan Miller, president and CEO of Miller Samuel, 2012’s year-to-date total remains nearly 20 percent below the 2008 peak and the median sales price of $3.36 million remains similarly behind at 17.1 percent.

“The key reason townhouses are faring well in 2012 is because they are generally a higher-end housing niche in Manhattan, accounting for about 2 percent of total residential sales per year, when including apartments, and the high end of the market continues to show more strength than most other market segments,” Miller wrote in an email to The Real Deal.

He added, “The luxury market is outpacing the overall market and townhouses are within the luxury market.”

Rick Pretsfelder, executive vice president and partner at Leslie J. Garfield, a brokerage firm that specializes in townhouses, said he attributes this year’s number to a rebounding market, and a turnaround in the development market. With current credit and pricing, he’s seeing developers become more aggressive in the market to get big numbers on returns.

In the wake of megamillion-dollar townhouse sales, especially those on the Upper West Side — in 2010, 26 West 76th Street sold for $19.4 million and 22 West 75th Street for $18.9 million, and late last year 247 Central Park West went for $22.4 —  “developers see these numbers… and see room to make a profit,” he said. More recent sales include 317 West 77th Street, which was sold for $11.2 million in March of this year, 45 West 84th Street, a townhouse with an $11.5 million asking price that’s currently in contract, and 137 West 74th Street, which broke the record for a townhouse not located on a Central Park block. He added that foreign buyers see these townhouse purchases as cleaner processes, with no co-op boards or “financial x-rays,” and safer investments in New York.

Wolf Jakubowski, a Brown Harris Stevens senior vice president and managing director who has sold more than $1 billion in townhouses since 1979, also pegs the increase in sales to developers’ interest.

“They see the luxury market is where they want it to be today,” he said of developers who are coming back into the market to buy multi-family townhouses and convert them into single-family homes. “They’re finding there’s a big market for it.”

Chris Riccio, an associate at Garfield, said that west and central Harlem townhouse owners, especially those with homes on 115th, 12st and 126th streets, west of Park Avenue, are looking to capitalize on their investments, which can yield a high percentage return.

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