So You Want To Own A Building?

David Goldsmith

All Powerful Moderator
Staff member
I think a lot of people who are used to having everything done for them and have no idea how to do things like restart a boiler when it goes down in the middle of the night will be in for some rude awakenings in their new roles as property owner/manager/superintendent/etc.
Are Brooklyn Brownstones the New Manhattan Co-op?
The coronavirus pandemic has many New York buyers shifting gears—and boroughs

The allure of owning a condo or co-op in Manhattan, an icon of success for many people, may be fading in favor of something once considered a little mundane: a townhouse in Brooklyn. While the increase in Brooklyn’s desirability has been happening for well over a decade, the pandemic has pushed more people to look for a home with extra indoor and outdoor space and less interaction with neighbors and staff.
Lindsay Barton Barrett, an agent with Douglas Elliman in Brooklyn, said she’s heard from colleagues that requests to tour condos and co-ops are significantly lower than in the past.
“We’re seeing a whole new group of buyers considering Brooklyn townhouses,” Ms. Barrett said. “People are really excited about what they can get, including things like private parking, an abundance of outdoor space, proper home offices and gyms all under one roof that they control.”

Condo/Co-op Sales vs. Townhouses
In October, sales of single-family homes in Brooklyn, which includes townhouses, jumped 215.4% in the $2 million-to-$3.99 million price range with 41 sales compared to just 13 in October 2019 in that price range, according to a Douglas Elliman market report. In Manhattan, co-op sales in that price range declined 25.2% year-over-year in October and condo sales dropped by 3.8%.
Analysis by UrbanDigs, a New York real estate services provider, found that even though townhouses in Brooklyn are typically more costly than a condo or co-op, they are in high demand this year.
“Due to their unique nature, townhouses normally have a tendency to linger on the market longer than apartments,” said John Walkup, co-founder of UrbanDigs. “However, the time on the market for townhouses plunged from 118 days during the peak of the pandemic by 77% to 27 days post-reopening, suggesting intense buyer competition.”
While co-ops in both Manhattan and Brooklyn also began selling more quickly after the market reopened, Mr. Walkup said the pace was more typical of a market resuming activity.

Despite a surge in listings for all property types, the increase in the number of contracts signed for Brooklyn townhouses doubled after the market reopened, further suggesting that more buyers are focused on this property type, Mr. Walkup said.

Physical Appeal of Brooklyn Townhouses
Townhouses typically offer more living space than most co-ops and condos, along with privacy.
“The magic of Brooklyn townhouses is that they offer you complete control over your living space,” said Nadine Adamson, an agent with Brown Harris Stevens. “This benefit has been amplified during the pandemic. You are not sharing germs in a lobby, elevator, staircase or hallway with countless other people like you would be in an apartment building.”
Most Brooklyn townhouses have outdoor space in the front and the back, said Gerard Splendore, a broker with Warburg Realty.
“Another feature, the iconic Brooklyn stoop, or set of stairs up to the front door, represents outdoor space that is widely used for socializing,” Mr. Splendore said.

In a co-op or condo, buyers are more likely to have a small balcony, shared outdoor space or none at all.
“Some buyers won’t live in a building without a doorman and staff, but others don’t want anyone around due to fears about Covid,” said Alexander Boriskin, an agent with Douglas Elliman. “So that’s certainly been another recent push for some buyers these days. The question is once we have a vaccine and Covid is no longer an issue, will the demand decrease?”
A Brooklyn location can be appealing for some buyers, too.
“Even in prior years, we’ve had people consider moving to Brooklyn to shorten their commute to the Hamptons, which has become even more relevant today,” Ms. Barrett said.

Townhouses in Brooklyn Heights are particularly sought-after and tend to have higher prices than some other Brooklyn neighborhoods, said Mr. Splendore, because of their proximity to Manhattan and views of the Manhattan skyline. Williamsburg and Greenpoint also have an easy commute to Manhattan, and Ditmas Park, close to Prospect Park, has freestanding houses as well as townhouses, he said.

Limited Supply and Long-term Value
Even if a townhouse has a higher purchase price than a co-op or condo, there are often financial tradeoffs that make a townhouse a better deal.
“Historically, the real estate taxes and long-term maintenance costs for a Brooklyn townhouse are comparably lower than any other form of real estate in New York City,” said Bill Caleo, co-founder of The Brooklyn Home Company, a residential development firm based in Brooklyn. “The management and maintenance costs from a co-op or a condo are undeniably higher, although some trade-offs include paying for repairs to your home and collecting packages. Given that most townhomes are attached on either side, utility costs are remarkably lower, making the buildings more energy efficient from the insulating factor of a shared wall with neighbors.”

The pictured brownstone townhouse in Brooklyn's Clinton Hill neighborhood is asking for $2.75 million.
per square foot is lower for a townhouse. For example, Ms. Adamson is currently listing a three-bedroom, three-bathroom townhouse with approximately 2,400 square feet in the Clinton Hill neighborhood of Brooklyn for $2.75 million.
“It’s four stories, plus a roof deck, terrace and garden off of the kitchen and a finished basement,” said Ms. Adamson. “Buyers are shocked at the space and value that they can get for a price comparable to a two or three-bedroom condo nearby.”

Townhouse owners also have potential income from renting part of the house.
“Some houses even bring in enough rental income to cover your mortgage entirely,” Ms. Adamson said. “How could a condo or co-op even remotely compare? Even if you rent out a garden level apartment, you end up with three times as much space plus a garden, deck or option of a private roof terrace.”
Even if buyers decide to shift back to Manhattan or to co-ops, Mr. Caleo believes townhouses will hold onto their long-term value.
“Developers can build many luxury condos and co-ops in New York City, but they cannot develop new brownstone neighborhoods in prime locations, so the supply is limited,” Mr. Caleo said. “Zoning laws and landmark designations will always keep townhouse density at or near its current level. The argument can be made that buying a Brooklyn townhouse is the safest long-term investment you can make since the supply remains the same indefinitely and the ownership cost structure is very low.”
 
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