The Real Deal New York

Houses of mirth

Why townhomes are Manhattan’s best bargains — for the rich
By E.B. Solomont | November 06, 2014 07:00AM

Reality television interior design duo Cortney and Robert Novogratz paid $4.3 million for their nearly 7,200-square-foot townhouse in the West Village in 2007. They recently listed the home for $17.95 million, or just under $2,500 per square foot.

While that price may seem high, the Novogratzes — who had their own HGTV show, “Home by Novogratz” — previously listed the house, located at 400 West Street, in 2009 for $25 million, to no avail. And compared with prices for new development condos in the neighborhood, the property, which is listed by Douglas Elliman broker Raphael De Niro, is a relative steal.

Ever dream of owning your very own house in Manhattan? Now may be the time to act: Thanks to the explosion of shiny new luxury condos in recent years, the price spread between townhouses and condos is widening — and, as a result, townhomes are looking like bargains. Compared with the Novogratzes’ asking price of $2,500 a foot, nearby condos range in price from $3,750 to $4,450 a foot, according to Halstead Property’s Louise Phillips Forbes. For those looking to get the maximum amount of space in a prime Manhattan neighborhood for the least amount of money, townhouses are increasingly attractive, wallet-friendly options for the wealthy.

Townhouses are significantly undervalued in New York City on a price-per-square-foot basis, said Forbes. “What [my clients] can get in a co-op or condo is nowhere near what you can buy, on a square-footage basis, in a townhouse,” she said.

“There’s been a run on our luxury market,” she adds. “These [condo] developments have captured massive numbers, and that market momentum has magnified these numbers in the differentials tremendously.”

Townhouses are a “fantastic bargain,” according to Brown Harris Stevens’ Paula Del Nunzio. “There will come a time when a house will cost $100 million, or $5,000 a foot, and nobody will blink,” she said.

Like most of Manhattan’s white-hot real estate market, townhouse prices are climbing. They’re just not rising nearly as fast as condo prices. The median sales price for a townhouse in Manhattan was $3.59 million in 2013 versus $2.7 million in 2004, a 33 percent jump, according to appraisal firm Miller Samuel. However, median condo prices saw a far more dramatic rise, jumping from $804,418 in 2003 versus $1.25 million in 2013 — a massive 55 percent increase.

The average price per square foot of a townhouse — $1,144 — is less than the $1,484 condo average. (Averages, of course, are often skewed by the astronomical sales that have been more readily defining the condo market.)

Sources point out that comparing the two types of housing can be tricky, since townhouse measurements include exterior walls and common space, while condos do not. Also, townhouses represent just a sliver of the residential market, accounting for less than 2 percent of transactions, according to Miller Samuel. And condos also get more expensive as they get higher in the building, while townhouses obviously don’t have that advantage.

“There is an intrinsic difference in value,” according to Jed Garfield, managing partner at townhouse specialist Leslie J. Garfield & Co. “With a condominium, you’re getting all the services that are associated with that. Some people will pay a premium for a condominium for just that reason.”

And that premium only seems to be increasing. Garfield said that in Chelsea, the average condo can fetch upwards of $3,500 per square foot, while the typical townhouse would likely average $3,000. A 15 percent-plus spread is the norm in almost every Manhattan neighborhood and it can be higher in certain areas, he said. “Those spreads are very real,” Garfield added.

All of this isn’t to say that well-priced townhouses aren’t going into bidding wars. Maura Jarach, chair of the townhouse division at Keller Williams NYC, said she’s seen plenty of those. But she’s also seen a buildup of overpriced listings, where the sellers are unrealistic about how much their townhouse is worth.

Others concurred. “[Townhouse] sellers are looking at the $90 million apartments and saying, ‘Oh my God, I have 6,000 square feet,’ ” said Linda Melnick, a broker with Stribling & Associates. “It’s like everyone’s child is gorgeous. You don’t see the flaws when it’s your own.”

Unlike newly built condos, townhouses often require extensive renovations, which can be daunting given the age (and potential landmark status) of the 19th-century buildings that make up the majority of the city’s townhouse stock.

Over the past few years, developers have recognized the potential profitability that the townhouse market offers and have given buyers the best of both worlds: new construction and newly renovated townhouses. Developers throughout the city have added townhouse components to larger condos complexes, such as the seven townhouses on Bethune Street at Superior Ink and the five forthcoming townhouses at the Greenwich Lane project.

“There are people recognizing that they can make more money by building out the spaces and marketing to people who aren’t getting what they want in the co-op and condo market,” Forbes said.

Read on for a look at some of the toniest townhouses to hit the market this year.

57 East 64th Street

At this townhouse, the asking price of $44 million — or $3,142 per square foot — gets the lucky buyer quite the package. This five-story home, located a stone’s throw from Park Avenue, originally hit the market for $48 million in March. Amenities include a floor-to-ceiling fireplace in the paneled dining room, an elevator that fits six and wrought-iron detailing on the doors to the entry hall, as well as the staircase. There are eight bedrooms and seven full bathrooms. Giampiero Rispo of Domus Realty and Paula Del Nunzio of Brown Harris Stevens share the listing.

116 Waverly Place

This 11,000-square-foot townhouse in Greenwich Village serves up seven bedrooms, seven full bathrooms and four half bathrooms across five stories. Listed for $34 million — $3,090 per square foot — it’s hard to ignore the home’s rooftop pool and hot tub that look out to the city skyline. An elevator connects all floors, and the home also comes with large picture windows on the rear façade. Peter McCuen and Jim St. Andre at Peter McCuen & Associates have the listing for the spread, which came to market in March.

278 West 11th Street

Located between Bleecker and West 4th streets, this impressive 6,500-square-foot spread first hit the market in March for $30 million, then slipped to $27.9 million in July. The 25-foot home has outdoor space on nearly every floor and there’s also a roof deck, which looks out to the World Trade Center and the Empire State Building. The basement has a 1,200-bottle wine cellar and home gym. On the next level, the eat-in kitchen opens to the terraced garden. And just above this, there are 12-foot ceilings in the parlor. In sum, there are three fireplaces, four bedrooms and seven full bathrooms. David Kornmeier of Brown Harris Stevens has this listing.

30 West 85th Street

The Upper West Side is known for its brownstones, and this nearly 7,900-square-foot spread, listed for $20 million, is a notable example. Situated between Central Park West and Columbus Avenue, this five-story home has an elevator and a finished basement, and it’s topped by a planted roof deck with a Jacuzzi. There are also seven bedrooms, seven full bathrooms and one half bathroom. Douglas Albert and Brian Rice of the Corcoran Group have the listing.

59 East 82nd Street

This renovated house, which dates to 1899, is located between Park and Madison avenues. Available for $17.2 million, the home’s interior square footage totals 8,300 square feet — that’s $2,072 a square foot — and can accommodate 500 more square feet in development rights. Inside, there’s a guest apartment, five wood-burning fireplaces and bay windows. There are also five bedrooms, four full bathrooms and three half bathrooms. The 1,009 square feet of outdoor space includes a front garden, rear garden, terrace on the fourth floor and roof garden. George van der Ploeg of Douglas Elliman has the listing.

48 West 85th Street

For $13.8 million, the buyer here gets a 7,000-square-foot townhouse just a half block from Central Park, plus four of the five stories delivered fully furnished with Baccarat crystal chandeliers, Tiffany dishes, paintings, books, sculptures and furniture. As for the bones of the home, there are eight fireplaces, coffered ceilings, crown moldings and a hand-painted ceiling mural on the parlor level. There are also seven bedrooms, five bathrooms and a garden. Wolf Jakubowski of Brown Harris Stevens is marketing the property.