Soft or not, what this market can’t get enough of is quality townhomes.
Exclusivity. Short supply. Two terms that are reserved for a small percentage of Manhattan real estate. The rarest of the rare—the perfect townhouse. There aren’t as many as you might think, despite all the brokers that bill themselves as “townhouse specialists,” or all the press around celebrated townhouse listings.
At any given time, there are between 75 – 100 townhouse listings in the Downtown, Midtown, Upper West and Upper East Side areas, with a breakdown of roughly 20-30 per area. Of those, approximately 40% are chopped up into smaller apartments, and almost 80% of them are what any buyer who deem a “total gut.”
If you’re considering buying a townhouse, it’s good to know the following.
- Find a townhouse in “single-family condition.” Many of the available townhomes in Manhattan and Brooklyn have been chopped-up—badly—and have fallen into disrepair. Besides the fact that any of these buildings are an immediate gut for the buyer, you have to deal with tenants, and the laws that protect them. If you’re a buyer who is looking purely for an income property, it’s simple enough. But if you’re a buyer who wants to restore the townhouse and live in it, you have some challenges to address, both in the purchase and renovation process.
- Understand the full-scope of work that needs to be done. Renovations for townhomes are never simple. They’re extremely complicated, time-consuming and very expensive. On average, if you purchase a $6MM townhouse, you as buyer can expect to put in a minimum of $1MM in renovations—and those are the basics like upgraded kitchens, baths, masonry, plumbing and electrical… not custom and designer finishes. The city’s new building code, which is in full effect July 2009, also raises new issues about what’s possible. If you’re considering buying a townhouse, consult with an architect and engineer to determine the best- and worst-case scenario on the scope of work you can expect.
- Know the neighbors and the street. Just as the best brokers know the in’s and out’s of a co-op board, or a condo’s rules, you should know exactly what you’re buying. This includes the neighbors of the townhome you’re buying. It’s easy enough to determine if the neighbors are renters or owners. Your broker will win extra points if he or she has already scoped out the territory, and what the new townhouse owner can expect in the way of support or opposition. Let’s face it, a townhouse renovation means construction, and lots of it. The last thing a new buyer wants to worry about is a persnickety neighbor complaining to the city.
Realize the potential.
This seems easy enough… as brokers we sell the dream of a new home. As a homebuyer in New York, what could be more fantastic than an actual house to call your own? The potential you can explore includes (1) an income property if the building can accommodate additional units or divides easily and fluidly, (2) the resale value associated with owning land… that’s something that’s easy to forget for most Manhattan buyers who live in co-ops and condos, (3) unprecedented privacy, (4) owning a piece of history—developers simply aren’t building townhomes anymore.
For the townhouse buyer, Wohlfarth & Associates has a list of qualified and experienced architects, engineers and code consultants to assist you with the purchase decision.