New York’s Townhouses Poised for Comeback as Buyers Prize Space, Privacy and Social Distance

A segment of the market that’s slumped in recent years may see a flood of fresh interest

Source: Virginia K. Smith, Mansion Global

The past two years have seen a slowdown in New York City’s formerly gangbusters real estate market, with townhouses facing a particularly stark slump—median sales prices for Manhattan townhouses plunged nearly 35% year-over-year in the third quarter of 2019.

But as buyers look ahead to life after the coronavirus pandemic, the city’s single-family homes may hold fresh appeal, and are already generating market chatter.

“It’s hard to draw conclusions yet, but we’re seeing interest,” Compass agent Jim St. Andre said. “Lots of people are calling asking about townhouses and what kinds of opportunities there are, especially on the renovated side, properties that are ready to move into.”

New developments offering deep benches of amenities have dominated much of the high-end market in recent years, but some New Yorkers who’ve faced the past two months stuck in their homes may find themselves reassessing the appeal of densely populated buildings, newly enticed by the lure of private outdoor space that doesn’t require a drive outside of city limits.

“There’s not a broker that doesn’t agree that the townhouse market is going to emerge from this pandemic stronger than almost any other segment, to be perfectly honest,” said Doug Bowen of the Doug Bowen/Zia O’Hara Team at Douglas Elliman.

Personal Space Becomes Top Priority

At the same time that apartment buildings have temporarily closed off amenity spaces, some of their residents are reconsidering the relative safety of a single-family home in the midst of an outbreak.

“Everything that was good about luxury buildings suddenly becomes a downside,” said Living NY director of sales Kobi Lahav. “People want to be isolated, and if you have your own townhouse you can stack it up with all the food you need, you can have your own shelter within New York City.”

Having a home with private access that doesn’t involve coming into contact with neighbors or staff comes with its own set of maintenance headaches, but also limits exposure risk. “Moving forward, privacy will be the ultimate amenity,” CORE founder Shaun Osher said. 

No matter how state-of-the-art an apartment building’s recreational spaces, for the moment, they’ll have a tough time competing with private backyards, and properties with extra space that could come in handy in the event residents need to shelter in place, host guests and family members for long stretches, or simply work from home.

“I live in Park Slope [in Brooklyn], and people here are using their backyards all the time,” said Bond New York agent Douglas Wagner. “I’ve noticed people wandering around our area in their downtime looking at homes. Brownstone Brooklyn is definitely getting inquiries.”

“There’s an upturn in the interest in townhouses throughout the city,” Corcoran agent Cathy Franklin said. “In the conversations I’m having, people love the idea of having multiple spaces to gather. It’s a really nice lifestyle, especially when the whole family has come home.” 

New Construction and Boutique Townhouses/Maisonettes Stand to Benefit

Buyers looking to relocate as a reaction to the current crisis aren’t, for the most part, interested in taking on years-long renovation projects, a preference that gives a significant edge to recently renovated, turnkey properties.

It could also mean increased demand for boutique condos and maisonette units that come with private entrances, but also include the service amenities one would expect in a luxury apartment building.

“There are townhouse units in full-service condo buildings, and some new developments, like 15 Renwick Street, have maisonette units,” Mr. Osher said. “They provide the best of both worlds—private access, private outdoor space, and multiple floor living, but with the amenities of a full service building, a doorman, concierge service.”

Mr. Osher said he’s gotten lots of calls inquiring about the availability of maisonettes, homes located on the ground floor with separate entrances from the rest of the building, which can sometimes be more than one floor. “The renewed interest is much more than it was prior [to the pandemic],” Mr. Osher said.

“Boutique condo buildings with three to 10 units will experience a similar uptick in interest and maybe valuation,” Mr. St. Andre said. “I could see people not wanting to share a lobby with a tremendous number of people, get into elevators, et cetera. I think people will find smaller buildings interesting and pay a premium.”

The widespread expectation that New York City is headed into a slower buyer’s market will also be a relative boon for new construction and recent renovations. “In any slow market for residential, people figure that the same price they were thinking about putting into a renovation, they can now get a turnkey instead,” Mr. Lahav said. “As prices go down, there’s no reason to take something where they also have to put work into it.”

“I’m not seeing a lot of people who want a three-year renovation,” Ms. Franklin added.

Pricing and sales data have yet to fully reflect the extent of the current crisis, but while townhouses were the first segment of the market to soften in the most recent downturn prior to Covid-19, in the case of the post-pandemic market, they may be relatively insulated.

“In prime parts of Brooklyn and Manhattan, we’re clearly off peak pricing by 10% to 15% already,” Mr. Bowen said. While Brooklyn condo prices could fall by another 10% in the current slowdown, Mr. Bowen said, “townhouses are more insulated from that by at least 50%, just because of the type of housing it is and this particular moment. I think two years from now, we’ll be in the hottest townhouse market we’ve ever seen in Brooklyn.”

Filed under: Headlines by Alec Reimon
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