Townhouse - Why has not it sold?

It is a little jammed in at the back.

I think I figured out. The taxes are going up next year significantly due to conversion to single family.

300 your conversations with yourself are always entertaining ;-) (this from someone who routinely startles fellow pedestrians and shoppers while having full-on, out-loud arguments with myself)

Haha. You have a point.

No original details left and there seem to be a lot of townhouses sitting around not selling.

Why would conversion to single family from multi-fam raise the taxes? i always thought the opposite...

Existing Single family taxes are low as the valuations increases are capped. They started with low base and current taxes are being charged at anywhere from 10-50 percent of uncapped market value. However, for a conversion, there is no historical cap and the city will charge taxes at full maket value.

thanks! learn something new about NY taxes every day!

However what the city lists as "market value" probably is going to be below actual market value.

In this case, it is 12.5mm for 2018-19.

Incredible how this can be listed at 8800 sq ft and "priced to sell at $1,363/SF. "First of all is approx 6500 gross and no the cellar is not sq ft that you are supposed to add. Even with that from 6500 to 8800? Is it possible that this industry, websites etc have zero standards when it comes to sq ft? At $12M this is $1,850/sq ft, certainly not $1,363 sq ft.. Why are brokers allowed to do this?

Still not sold. They are definitely losing money on this.

PS looks like taxes doubled to approximately $130k.

Exactly my point
“I think I figured out. The taxes are going up next year significantly due to conversion to single family.”

I feel bad for the owner of this house. I think it is still wildly overpriced. It's not a great townhouse street being surrounded by townhouses that are still apartments and next to an apartment building, the house is fairly large but it somewhat gives the impression of being big for the sake of being big (i.e., it lacks charm and looks like they were just stuffing in rooms and bathrooms without any real vision), the taxes are too high, etc. Who buys this house as compared to alternatives anywhere close to that price range? I just can't picture the buyer who decides this house makes sense.

I know that this house is wider, but I think that the sale at 45 West 84th should be a signal to the owner. That house was on a much better townhouse street, had lower taxes and had a celebrity seller. It's paint job was an eyesore, but the outside was much nicer and I think it had a better layout. It sold for $8.75mm. I think that 58 West 75th would be lucky to get that much.

And in the time-honored tradition of having a conversation with one's self, I'll add that I am sure the owner of 58W75 is pointing to 18W75, which sold for $12.25 after going into contract last September. I would say that 18 was on a better part of the block, it was a better renovation and that the market was better last September. I don't think that 18 could get that much today.

I have not done any calculations to back this up with numbers, but my gut feeling is that townhouses shot up more in price than coop/condo apartments and not only did prices end up overshooting the market, but since I think a lot of people bought townhouses without really wanting a townhouse but didn't have a choice due to the dearth of 4/5/6 bedroom apartments and then when the supply of those apartments boomed due to developers building into that market it really hurt the demand for townhouses.
As a result I think there is a good chance townhouse prices will get hurt more than the market in general. I also think a lot of these townhouses (like this one) are being hit with huge tax increases and one of the biggest advantages of owning a townhouse (i.e. being relatively undertaxed) is disappearing.

30, What you are saying is true except for certain locations like prime village. Townhouse (measured ex below ground space) premium over condos has disappeared on UWS along with tax advantage and new supply of larger apartments.

My above comment is backward looking. Forward looking, valuations relative to renovated resale condos are in the fair range on UWS but high absolute $ price segment - call it $7.5mm+ is oversupplied.

https://www.nytimes.com/2019/04/05/realestate/spruced-up-manhattan-townhouses-sell-for-big-discounts.html

They cut the price by another $2 million. I still doubt that it will have a buyer closer to this price but I think that the large cut was a smart step.

I have a related question for the real estate experts out there. On what grounds could the owner try to get the taxes reduced on this property?

My best guess is on final sale or listing price. Should be appx 1.1% (6% time single family tax rate) of listing or sale price.

Nope. In NYC it's not by sales price. The wat you get your assessment adjusted is by giving examples of comparable properties with lower assessments.

That is correct. Only your neighbors have to sell at low price per sq ft. Listing price wouldn't matter and your purchase will become a part of comps. Even at the current listing price, you will get well north of $110k per year.

Interesting. Thanks. 30 and 300 - the two of you should have a podcast discussing various real estate topics. You are both a wonderful resource.

Thank you. Happy to participate in there discussions and learn.

This is certainly a tale of the townhouse market. In November 2013 it sold for $8.5 million and then again June 2015 for $9.1 million as a rehab project. Now it's asking $10 million fully renovated. I don't see how they are going to lose less than $2.5 million on this and maybe double that (or more?)

Was looking at some older threads. Anyone want to make a prediction of where this house ultimately sells? Under or over $7.5mm?

Interesting though, brownstone Brooklyn market has been very hot as of late. We've participated in three calls for highest and best over the last two weeks.

Apropos of nothing, I'll just point out if you multiply the touted $1,136/SF times a usable SF of 6,500 you get $7,384,000.
They may be being hoist on their own marketing petard.

Interesting. What price point are these townhouses in Brooklyn?

Mid 2's.

No more $5mm park slope deals at ask needing Reno?

Mid 2s may be consistent with what 300 has been pointing out in some other threads that the market isn't dead at lower price points. The numbers are weak compared to inventory but transactions are still occurring.

At higher price points, I think it is a different story.

This particular townhouse has a myriad of other issues that are exacerbated by the market forces.

@300 is referring to a $5M townhouse deal we did in Brooklyn a few months ago. Not sure about that market as we haven't had any new $5M townhouse buyers! We are very close to signing a contract on a 7.8 million-dollar penthouse in Williamsburg (not listed).

We've definitely seen an uptick in business over the last 3 weeks. We have four or five deals with accepted offers currently. Couple of our listings recently found buyers, 1 after the first open house 1 after a price reduction post summer. Our newest listing on East 16th Street has been getting a lot of attention pre the first open house this Sunday. Believe it or not on the buy side under 2m, we've participated in a few best and highest. The right properties at the right price in the right location are attracting multiple buyers. I know I sound like a broken record.

Keith
The Burkhardt Group

I've seen similar in Manhattan townhouses under $4m. There is still a market for owner occupied properties at reasonable prices in decent condition and decent neighborhoods.

For the experts on the board, what do you think the next chapter of this story is? Removed from the market yesterday. It seems that the owner is completely upside down on the property.

Do you do a large price cut and hope for the best? Do you try to run an auction to get more eyes on it? Do you try to rent it and hope for a better market in the future?

My vote is change broker but make little or no meaningful change. Unless they are handing it over to creditors.

30 - is your prediction for what the Seller will do or what the Seller should do?

For purposes of answering, let's assume that there are not creditors that are about to foreclose and that the Seller is not in an immediate cash crunch.

Will do.

There is no mortgage recorded on the property currently. So they can wait.

This is owned by a "investor" that made a habit out of buying, renovating and flipping townhouses converted from rentals back to single family. It is one of the firms mentioned here. https://nypost.com/2016/06/15/developers-are-making-millions-flipping-rundown-townhouses/

This had to be a rather expensive renovation. Rental conversion likely means everything inside from floors to interior stairs to windows are new. Added a partial floor on roof, now carrying purchase + renovation costs for 4 years. Taxes are now $140k/yr. They should move in, live in it for a year or two, and try again later.

nyc_sport, if the developer really is an individual owner, is looking for a place to live and this neighborhood works for them, then your answer makes a lot of sense.

That tax bill is crushing. About $12k per month. If they were to rent this, I'm wondering how much above that they would get... $10k more? $15k more?

35-50k will be the rent.

300 - that sounds high to me. What are you basing that on?

This listing is still trying at $32k a month, and I think it is a better townhouse.
https://streeteasy.com/rental/2760520

Interior width. Bigger square footage

300 - you know the market way better than I do, but that just strikes me as extremely high for that house. When looking at other properties for rent on the UWS or that have rented in the last year, I don't see precedent for it.

I'm on Team M's side about rent here; that estimate seems high. UWS luxury rental market is tough because in some ways none of the choices are good ones, but I think this house

https://streeteasy.com/rental/2613864

which was at $35K list and rented under, is nicer than both 71st street and 75th street.

https://streeteasy.com/rental/2386073

Ali, Big difference in location.

I like that last one better! Quality of finishes seems much higher. And I know some people don't like near RSD in the 80s but the park access is actually very nice there.

It used to be you wanted to be either between CPW & Columbus or WEA & RSD; in between, not so much. But Amsterdam has changed a lot - a friend's brother owned a bar on Amsterdam in the high 80's back in the 1980s and the area was considered "sketchy."

In order to satisfy my curiousity, I am now hoping that they will rent out this house so we can see where the rent would land.

We wouldn’t know real rent from the listing. So it is all for discussion.