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Summer 2020 Townhouse Report

Overall Market Activity Since Phase 2

Since NYC entered Phase 2 of the NYS reopening plan on June 22, the market has returned with a tidal wave of new listings – 1,820 in Manhattan and 1,553 in Brooklyn – more than double the number of listings that entered the market across both boroughs during the same period last year. Despite many doom and gloom predictions, buyer activity has increased as well, most notably in Brooklyn, which has seen 450+ listings enter contract since the start of Phase 2, bringing contract activity in the borough within 13% of 2019 figures for the same time period. As expected, however, inventory and activity has varied widely by product type, and on the higher end of the market we've seen increased negotiability and competitive pricing as sellers vie for buyer interest in a suddenly saturated market. Today's report details the latest developments in the Manhattan and Brooklyn townhouse markets. Please do not hesitate to contact us if you have any questions. Manhattan Townhouses under $4M

Manhattan townhouse inventory below $4M is predominantly located north of 96th Street though it may be possible to also find such a listing south of 96th Street which needs an extensive renovation. While new listings are down compared to last year (only 8 new listings of 1- to 3-unit townhouses priced below $4M since Phase 2 began versus 11 in the same time period last year), active inventory remains high with 60 additional units currently on the market. While these homes are currently priced conservatively at an average just under $1,000/SqFt, individual prices vary dramatically based on location, size, and renovation work required. While we are limited by a small sample size from which to draw conclusions, based on available information, in-contract listings had a price reduction of less than 4% on average, and homes that have sold since May 1 closed on average ~4.5% below asking price. Manhattan Townhouses over $4M On the higher end of the townhouse market in Manhattan, inventory has increased significantly since the start of Phase 2, with 23 new 1- to 3-unit listings versus 17 during the same time period last year, listed at an average price per square foot of just over $2,000. However, homes currently in-contract were priced much lower at an average of $1,737/SqFt, and had 3% price reductions on average from their initial asking. While only a handful of these townhouses have sold since mid-June, the 5 closed sales sold at ~$1,662/sqft, on average 17% below initial asking.

Brooklyn Townhouses over $2M In the higher-priced tier of Brooklyn 1- to 3-unit townhouses, inventory is much higher compared to this time last year, with 46 new homes priced over $2M+ listed in the last two weeks (versus just 19 in 2019). There are 150 active listings, priced at an average of ~$1,150/SqFt. How these listings will perform remains to be seen. During the pandemic and immediately after, average price per square foot on closed listings was substantially lower. Similar homes sold under $1,000/SqFt on average from April 1-June 22, and for $1072/SqFt since June 22. However, the predictive value of this data is limited due to many factors, including limitations on showings and low levels of new inventory (as opposed to stale inventory that had been on the market since the winter or longer). Brooklyn Townhouses under $2M

The Brooklyn townhouse market below $2M is a huge and varied segment. In some neighborhoods, like Brooklyn Heights, there may be no townhouses even available below $2M. In places like Park Slope or Boerum Hill, it is possible to find a property that is below $2M, but these are rare and likely means the property requires a gut or has some other issue. There are also many neighborhoods where most if not all of the inventory (from gut to brand-new renovation) lies within the $1-2M range. So, it is very hard to generalize. Add to that a problem with data -- while there are plenty of listings across Brooklyn, we have very little reliable data in some neighborhoods, particularly those further away from Manhattan. For that reason, we will be limiting the following analysis to 1- to 3-unit townhouses in neighborhoods adjacent to or north of Prospect Park in the $1-2M range.

Since the start of Phase 2, there have been 119 new such listings compared to 86 during the same time period in 2019. This segment of the market tends to have little negotiability except for homes with major problems, i.e. those with title or occupancy issues or those requiring such extensive renovations they are not traditionally financeable. While this continues to be true generally, this summer buyers may be able to capitalize on the increased inventory to drive some negotiability. Listings that have closed since the start of May have sold, on average, ~7% below asking; however, negotiability ranged widely, as ~51% of these homes sold with no price reductions while on market, and closed less than 3% below asking on average, while the remaining 49% of homes reduced by an average of 8% while actively listed, and closed more than 11% below their initial asking prices on average.

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