Another "what will it sell for?" Townhouse

And you do not get a floor plan in the listing. How about $9mm max?

I should say $9mm will be reasonable as who knows what some one will pay.

There are floorplans in old sale and rental listings, but given this traded for $8.4MM 8 years ago, I don't see the seller taking $9MM. This looked to be in estate condition 8 years ago, I assume the buyer (a Hollywood type) renovated (building permits were pulled in 2015, and a landmarks approval for extensive renovation last year)??.

I do not think actual Reno was done. Townhouse market is the worst hit of any markets and highly illiquid as in who knows whether the previous sale was at market or 15 percent above or below market. I have seen a sale taking 20-25 percent loss from 2017 to 2018 on UWS prime park block.

This is the sale. 30% loss and the first sales was almost 50% of original asking price. This type of sales make me feel that most of the froth is out in townhouse market now. Top-end new developments are still frothy. Mid range Manhattan did not have that much froth and has adjusted down 3-6% already.

https://streeteasy.com/closing/10535661
https://streeteasy.com/sale/1330124

From what I understand the first two floors are gutted and the top two floors are "original" condition.

After I posted this, I was going to start a thread about the townhouse market seeming to be tanking, but I haven't had time to come up with specific examples (so it seems 300 and I are of a like mind on this).

I think it has already tanked on UWS and UES - I did extensive research on that when I was recently considering buying a townhouse for my very small re-development business. I think limited downside at this point (does not mean there is upside) after an estimated 15-35% decline from the peak actual trades in under $2k per sq ft properties ex fully below ground space. UWS has been more impacted than UES.

It has not tanked in prime downtown locations but softer by 10-15% percent. Village Townhouses can easily go down 15% on top of that.

I have no view on direction of townhouse market, I just doubt it is at 2011 levels for a West Village townhouse. But also do not read too much into the West 71st street example. The 2017 sale was a foreclosure auction, and the buyer was the foreclosing lender. 2018 price seems low, and the LLC buyer appears to reflect some nostalgic knowledge of NYC real estate as it is the name of the original architects.

Just a general note on looking at recorded sales prices for foreclosures: when a property gets foreclosed on, you are supposed to record the sale as the higher of the lien amount or the auction price. Obviously, the lien is almost always going to be above market or the property wouldn't be foreclosed on. So when you look at what you think is a recorded sale price on a foreclosure, you very well may just be looking at the lien amount.

Thank you for this info Nycsport and 30. So at some point of time, property was valued even higher than the 2017 sale amount for the sale amount to be the lien amount? This will make price decline of 2018 sale even steeper. I happen think that 2018 is a very good price for the buyer.

Hence my opinion that UWS townhouse market has already crashed and probably will be stable at the recent sale levels (not asking prices which still have 5-20 percent room at the current ask). That said, I did not act on this view but came close.

300 - if you are so inclined, could you please explain why you don't think prices would fall further on this segment?

Very simple. While I can not say they will not fall further but I believe there is not that much room to fall more than 5-10 percent on the UWS from the recent actual trades barring a recession. The townhouses used as multi unit rentals in rentable condition have a bid at 950-1100 per square ft. Finished townhouses are trading at $1500 per sq ft range which is what a condo trades at.

I must say that I would only buy one to live in it (I have no such need or desire) knowing that bid-offer spreads will always be very wide unlike a coop or condo.

Here is some more evidence of crash.
https://streeteasy.com/sale/1295785

Save some work.
https://streeteasy.com/talk/discussion/42766-sale-at-427-east-85th-street

TeamM,
As someone who has been looking at townhouses for a while I would like to know your expert opinion on the market.

To be clear, the foreclosure on the W. 71 st property was incident to a bankruptcy, and the property also had been pledged in support of some commercial loans (in addition to a mortgage). So, the lien amount reflects no view on value (and the lien would have included years of unpaid interest at default interest rates, expenses, etc.).

Thank you. Very informative. So not clear way to know what the value of property before was before 2017 besides comps. I still can’t believe how low is the 2018 price for a propert only needing cosmetic updates.

30 - you are too kind, but I am not an expert on townhouses or any element of real estate.

In general, I think that NYC luxury real estate (and perhaps all real estate) is going to come down. I don't know how much. I base this on a variety of factors, not the least of which relates to taxes. That impact will take several years to flow through the market but I think it will be a lasting downward pressure. I don't see townhouses being immune to that pressure and for a variety of reasons I think that townhouses could be hit harder. For example, they are a suboptimal choice if it is not your primary residence, and that has a cascading effect when thinking about how people are thinking about their lifestyles and the tax code. One could argue that all of those elements are already built into the current pricing, but I don't believe that to be the case.

I hope that I am wrong.

TeamM,
In all seriousness, it has long been my belief that while brokers are supposed to be experts in all facets of the market, that was only really possible back when most brokers specialised in one neighborhood. Now that most brokers aren't even attached to one borough, less one neighborhood, it's pretty much impossible for them to know everything about all property types, sizes, etc in all these areas. However when a buyer looks at a decent number of properties (especially in a niche market like townhouses) I think they can quickly become as much of an expert as all but a small handful of brokers *in that niche market only* fairly quickly. And I really do feel that describes your experience. And agree with your assessment.

30/TeamM, How much lower do you expect a townhouse substantially similar to this one to go down? Every bear has a price target.

https://streeteasy.com/sale/1330124

From the sale price above.

I don't have an exact number. I think it could go significantly lower over the next several years.

I suspect the strength/weakness of the US Dollar will play into pricing of townhouses, just as it will with luxury market and determine the relative attractiveness for offshore buyers.

Re the MacDougal St property, the sellers are likely hoping that NYU comes along with a big bag of donor money and a willingness to overpay.

I have worked with NYU looking to buy townhouses in Greenwich Village and I didn't find they were willing to overpay for anything.

NYU does not like to overpay as far as I know. They buy commercial property in poor or not great cashflow condition, pay a little bit of premium, rehab, and improve the area in the process.

Another evidence of UWS townhouse market crash. Below 2011 price (2009 sale was pre renovation; Reno probably cost $3.5mm with commercial rate carry of 7-8 percent) and in contract for less per sq ft than a condo in good condition (not this townhouse quality reno) would cost and 30-40 percent below say Belnord. So townhouse premium has disappeared to negative over decent non new development condos which means that multi family rental townhouses will not get converted to single family.

https://www.google.com/amp/s/nypost.com/2019/02/11/svu-star-mariska-hargitay-takes-a-loss-on-her-uws-townhouse/amp/

300 - do you know what it went into contract for?

No. Guessing no more than $9.25mm. Appx $1500 per above ground square footage.

I suspect that's right. I wouldn't be surprised if it is significantly less than that.