Douglass Elliman just released the 2011 edition of its annual New York townhouse market 10-year report, prepared by Miller Samuel. From Jonathan Miller's blog: "I define a 'townhouse' as a 1-5 family house that can be delivered vacant. It’s one of my favorite reports to work on because the market is so unique. Purchasers rarely view these properties as vehicles for cash flow – in appraisal parlance, their 'highest and best use' is eventual conversion to single family occupancy." The report is copy protected, so I'll respect that. But from Real Deal writer Adam Fusfeld: "Sales activity increased 22 percent between 2010 and 2011 to 240 transactions, the highest total since the credit crunch. But Miller said it’s about on point with the 10-year average of 250 sales. A decade’s worth of data show a 112 percent increase, according to Miller, because there’s so little new construction in the townhouse market. In fact, the townhouse stock is so old that the average townhouse sold during the decade was built in 1908.
"'The numbers make the case for a long-term view of housing,' he said. 'Real estate professionals lost their way, viewing it as a short-term investment. As an asset it’s slow-moving, but we had a different standard during the boom of double-digit price increases and that’s the wrong approach. Property shouldn’t be considered a liquid asset like a stock.'"
From Crain's writer Amanda Fung: "The median sale price dipped 5.1% to about $3.7 million last year, while the average sales price slid 9.4% to roughly $5 million. The decline was largely a result of a steep rise in sales of three-to-five-family houses, which represented 38.3% of all sales last year, compared to 22.3% in 2010. Mr. Miller attributed the increase in sales of this house type to a boom in the rental market, which is emboldening some buyers of three-to-five-family houses. Those three-to-five-family houses also tend to be smaller in size than single-family houses. Over the last decade, single-family homes averaged 4,837 square feet and three-to-five-family houses average 4,420 square feet.
"Despite the dip in prices last year, townhouse prices have handily outpaced the overall residential market in terms of price growth this past decade. Townhouse median sales prices have more than doubled since 2002, while median sales prices in Manhattan overall have risen 89% to $850,000." (Photo credit: Buck Ennis.)