Townhouses have long been status symbols in New York City’s luxury market, but in recent years, faced with fierce competition from commodity-rich condo developments, sales have plummeted and prices have plummeted. lowered.
This trend could be suddenly reversed, in part thanks to the demand for privacy, square footage and coveted outdoor space caused by the pandemic. Five townhouse contracts for homes priced at $ 4 million or more were signed in Manhattan in the first week of June, according to this week’s Olshan report, making a total of 95 house deals. in row since the beginning of the year. from January to June 2015, when 72 transactions were concluded.
âThe only conclusion I can draw is that this surge in New York townhouse sales is linked to the pandemic,â said Donna Olshan, president of Olshan Realty and author of the report. âPeople are looking for a large space and with that, self-contained privacy, without dealing with other apartment owners or sharing elevators. They want to have their own house, their own equipment and their own garden, and they are willing to pay for it.
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Part of the surge in activity is likely attributable to pent-up demand from 2020, when much of the city’s real estate market was temporarily on hiatus.
âWe had six months where nothing happened last year, so there is naturally going to be pent-up demand,â said George Vanderploeg, a broker at Douglas Elliman in Manhattan. âWe also saw it after the financial crisis of 2008. There were months of inactivity, then a strong demand thereafter.
Buyers who would once have turned to luxury condominiums have also turned their attention to the townhouse market, and even as Covid-19 infection rates drop and pandemic restrictions lift , this trend may not be reversed immediately.
âI have never seen so many apartment buyers looking for homes as I have seen now,â Vanderploeg said.
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With the definition of luxury changing over the past year, affluent buyers may continue to be less interested in traditional amenities than in factors such as space and safety.
âThe $ 5-10 million buyers who say ‘we want equipment’ aren’t necessarily looking at the townhouse market,â said Kobi Lahav, senior general manager of Living New York. âBut especially after the pandemic, you had a whole year where you couldn’t use these amenities, and getting into an elevator was risky. And for the cost of owning a $ 10 million apartment and paying the common charges, you start to think, “why not take care of my own townhouse.”
The surge in activity has focused on still popular neighborhoods like the West Village and other parts of downtown Manhattan, Lahav said. However, activity was slower to rebound in the upscale neighborhoods.
“By September, no later than next March, you’ll start to see it on the Upper West Side and Upper East Side,” he added. âThese are neighborhoods that have suffered a lot from the pandemic. “
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Despite their high prices, townhouses are now also a relative bargain in the context of New York’s luxury market.
âThese properties have been depressed for a long time and they are very valuable,â Mr. Lahav said. âEveryone in the $ 6 million plus range is asking if they should be looking at townhouses. Upper East Side townhouses that cost $ 8 million or $ 9 million five years ago are now selling for $ 5 or $ 6 million, and there’s no way that won’t go back, so there’s value there.
Townhouse prices peaked most recently in 2017 and “today we are about 20% below these peak prices,” Vanderploeg said, adding that these houses had lost just around 10%. since the start of the pandemic. “But sales are strong, so at some point prices will start to firm up, and it might even be happening now.”
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While big townhouse deals, including the $ 50 million sale of disgraced financier Jeffrey Epstein’s former home on the Upper East Side, can skew pricing statistics and make headlines, much of the Manhattan market is now driven by smaller sales, many to families preparing for the return of the children. in-person classes in the fall.
“There are a lot of small deals under $ 6 million, under $ 5 million on the Upper East Side and Carnegie Hill,” Vanderploeg said. âThe demand is very large. Apartment people are suddenly discovering townhouse life, and I think it will continue.
Ms. Olshan added, âThe supply of these homes is limited and I think over the long term the real estate market is a good place to invest in New York.