Halstead Property

Don Correia
Sr. Vice President
Westside Office
Tel: (212) 381-2371
dcorreia@halstead.com

Tracking The Townhouse Tumble

It's not your average buyer who can afford a Manhattan townhouse during the good times. And now, because the wealthy have been hit hard by the downturn and have less purchasing power, the pool of townhouse buyers has shrunk even more.

This month, The Real Deal talked to analysts and townhouse brokers about how one of the most specialized residential sectors of the luxury market (a market that has suffered severely since the downturn started) is holding up. According to one report, townhouses have seen an average sale price drop of 32 percent over the past year.

Some townhouses have seen even greater declines. One broker cited 16 West 12th Street, which was listed for $25 million and ultimately sold for 40 percent less, at $15 million.

Despite those price cuts, another broker said townhouses are still the most overpriced sector of the residential market, joking that there should be a tour called "Overpriced Townhouses in the 70s."

But activity has picked up in the townhouse market in the last few months, and many of the deals that are closing are all-cash transactions. Brokers say prime areas like the West Village and the Upper East Side are doing better than fringe areas, and that renovated townhouses with broad appeal are selling better than fixer-uppers.

For more on what kinds of homes are faring best and worst and who is still in the market to buy, we turn to our panel of experts.

Donald Correia

Senior Vice President, Halstead Property

What are you seeing in terms of activity and prices for Manhattan townhouses now compared to a year ago, six months ago and three months ago?

A year ago, our industry had definitely slowed down. Everyone was concerned that the city and economy were doomed. About five or six months ago business began to really pick up, and now townhouse brokers are busier than ever.

Who are the buyers you're seeing in the townhouse market?

Families that want to raise their children in a townhouse, people tired of dealing with co-op rules. I'm not seeing many foreign investors in the market right now unless they're moving into the city.

Which Manhattan neighborhoods are doing best and worst with townhouse sales?

I'd say the Upper East Side, Upper West Side and West Village [are doing best]. They've always been the strongest townhouse markets in the city, so when the market started to recover, these areas were naturally the first to recover. Harlem and points north [are struggling the most].

Have you seen many townhouses being rented out?

Not really. We've had requests to rent townhouses we represent. None of our owners are interested. They want to sell. That said, if I had someone looking to rent a townhouse, I'd be calling the brokers who represent townhouses, especially ones that have been on the market for a long time.

Monday, March 01, 2010