May Brighter Report: Neighborhood Arbitrage and Sub Market Speed

 

The Full Corcoran Brooklyn Townhouse Report is 16 pages,

I didn't want to overload the newsletter with too much data, but can send the full report if interested. 
Just MSG ME, petercharles.bright@corcoran.com

Corcoran’s 2020 Brooklyn Townhouse Report surveys sales of single- and multi-family townhouses throughout the borough. In 2020, the Brooklyn townhome market felt the effects of Covid-19 and the market “pause” during the spring selling season.  However, single-family townhouse closings actually increased versus both 2019 and 2018. This improvement was likely tied to buyers’ desire for more privacy and outdoor space.

2020 Data Analyzed and published in May 2021.

There is and will always be a data lag, considering the 45-90 day period form contract to close.  
Thankfully, I have "in the streets" experience to supplement and update the data.

 

2 BED TO 2 FAM or 3 BED to 1 FAM

When you compare average prices of a 2 bed Condo in say Williamsburg with a 2 Family house in Bed Stuy, you tend to double your space and trade $1500-2k in pre mortgage monthlies for Lower Taxes, Deferred Miantenance, and $2k of Income.

I can run comparisons for all neighborhoods, but my most recent experience is here.  You won't get skyline views or an amenity package, but you do get to live the iconic New York dream or staircase and stoop.  Backyard and likely double the space.  You don't need to be handy, but you do need to find a layout and location that best suits your needs, as townhouses have many variables that either require guidance or swift adaptation to identify a suitable option in the desired time frame.

Media tends to select higher price points, as ~2M wasn't high enough, so i'm gonna skip UES/Brooklyn Heights and use Williamsburg to Central BK as a case study.



AVG/Median 2 bed on Williamsburg Northside


AVG/Median 3 bed on Williamsburg Northside

AVG/Median Townhouse Central BK: Fort Greene, Clinton HIll, Bed Stuy, Prospect Heights





Stay tuned for a full report in the upcoming weeks for those of you looking to get more space and choosing between apartment and townhome.

Granted this is a very specific play, but back of the envelope, 450k gets you from a 2 bed condo to a 3 bed condo or a Townhouse.  450k represents your 20% down payment, but it also represents approximately $2600 in monthly payments.  A garden rental unit or floorthru, generally rents for +/-$2600 in stable markets.  

Provided you are only required to do cosmetic upgrades to taste, the combination of income, deferred maintenance, and lower taxes, tip the scale in favor of Townhouses, which are also in fewer supply (rarer) and therefore more valuable over time since they cannot be replaced.

Granted the combination of views and amenities may be a luxury you select for, but the tradeoff, in your applicable sub-market and relative arbitrage of monthlies makes a compelling case for those less gung ho about condo life.

"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."

Barrons, Are Brooklyn Brownstones the New Manhattan Co-op?, 11/23/20

“Townhouse owners are responsible for all maintenance but can save when they don't have to pay monthly common charges, with real estate taxes often lower as well.” 

Condos vs. townhouses: Which is a better investment in New York City?