2022 Year-End Manhattan Townhouse Report

The 2022 Manhattan townhouse market was defined by a particularly strong first half of the year, with annual sales volume only slightly behind record breaking 2021. As the state of the economy grew more uncertain leading into the summer, buyers seemed to step back to wait and see where the market was headed. This was particularly true in the multi-family segment where rising interest rates have caused cap rates to expand. Despite this uncertainty, pricing and volume remained steady, albeit slower than the first two quarters. With the pandemic waning over the last 12-18 months, we also compared 2022 to pre-pandemic sales of 2019 to see how the townhouse market has changed. The results are compelling, with pricing up 17%. Volume was actually down 25% over the same period, but 2019 numbers were skewed by mid-year rent law and mansion tax changes which led to a surge in transactions during the first half of the year. The takeaway from the price increases is that townhouses are in demand with buyers becoming attracted to the idea of more square footage, privacy, and outdoor space as the world changed over the last few years. In the multi-family segment, the rent law changes and rise in interest rates has put downward pressure on both pricing and volume, but has created opportunity for significant upside for single family converters. There were some banner sales this year, including our sale at 12 East 63rd Street for $56M and a record setting townhouse sale on the Upper West Side for $26M. It was a good year for the luxury market as supply chain issues and rising costs of construction increased demand for renovated townhouse product. Despite a slower second half of 2022, we are optimistic for 2023 given that inflation is showing signs of coming down and the stock market is holding steady. Buyers are still active, particularly in the move-in ready renovated market. Available properties on the market are below historical norms, helping to maintain higher pricing.