Demand for Brooklyn townhouses rose during the pandemic, but the surge wasn’t merely a Covid-driven trend.
Prices for townhouses in the borough have been steadily rising for nearly a decade while the condo and co-op market has remained fairly flat, according to a report from UrbanDigs.
The median sale price for Brooklyn townhouses with three or fewer units is now about $1 million, up 85 percent from 2012, when it was $550,000.
Condo and co-op prices also grew, but less. The median price for a co-op is now $780,000, a 59 percent increase from 2012, when it was $490,000. For condos, the median price is $925,000, up 64 percent from 2012, when it was $565,000.
The difference in growth is in part because the market for Brooklyn has more neighborhoods with moderately priced units, such as Bay Ridge, Bensonhurst and Midwood, which eases competition, said John Walkup, who authored the report.
“These areas also have a large number of buildings built to be rentals, which along with the larger supply of sales units, keeps prices in check,” Walkup said. “The townhouse market, on the other hand, is more constrained for buyers.”
With fewer townhouses available and their supply relatively static, their prices tend to rise more quickly in a strong housing market than those of condos and co-ops. Stately row houses in brownstown neighborhoods such as Park Slope and Cobble Hill routinely go for $4 million or more. One in Brooklyn Heights sold in January for $25.5 million, a record price for a Brooklyn home.
Gerard Splendore, an associate broker at Warburg Realty, remembers selling townhomes in Bay Ridge and Marine Park for $750,000 just after the market collapsed in 2008. Now their asking prices exceed $1 million.
“Everywhere that was kind of the fringes is now highly desirable,” Splendore said. “There’s really nowhere else to go, there’s nowhere else to look. You keep pushing further and further out.”
In northern Brooklyn — a region that includes Bushwick, Williamsburg, East Williamsburg and Greenpoint — the median price for a townhouse has risen 24 percent since 2019, according to UrbanDigs.
Central Brooklyn, including such neighborhoods as Bedford-Stuyvesant, Crown Heights and Flatbush, has seen the townhouse median climb 22 percent in that time.
But it isn’t just the increase in sales prices that has an impact.
Large purchases and renovation projects have a trickle-down effect on buyer confidence, said Ravi Kantha, director of Brooklyn sales at Leslie J. Garfield.
“If you’re shopping with an $8 million budget, that’s a lot of money, but if you know that multiple people are spending $10, $12, $15, $20 [million] down the block, it takes a little bit of that hesitation away,” he said.
“I would bet the average asking prices go up pretty significantly in the next year or two across the board,” said Kantha. “It would just be interesting to see what people are willing to pay for.”