Brownstone Revival Coalition Seminar

Excerpts From My Presentation on the Upper West Side Townhouse Market at the Brownstone Revival Coalition Seminar on June 9, 2009

(Part One of Three)

” I’m Dexter Guerrieri, and I’m going to be wearing a couple of hats tonight. As the Chair of the Brownstone Rival Coalition, I’ll introduce our guest speaker, and I’ll be the moderator for our discussion that follows. It is embarrassing how many years I’ve been doing this, so I won’t tell you. This is the 22nd annual. So, people keep coming, and we keep doing it. Also, I am the president of Vandenberg Real Estate, the townhouse experts, and I’ll discuss market statistics on the Upper West Side. As many of you know, there is an obligation and a precedent that I tell a joke in the beginning, and the requirements are that it has to be politically correct, unless you are a farmer. Here’s the joke: My 11-year-old tells this, and he gives me credit for the joke. What did the chicken say to the farmer? “You cross the damn road!” So, that’s the joke, and that pretty well sums up the townhouse market.

A few words about Brownstone Revival Coalition. It was formed in the 1960s in the hay-day of the urban renewal, which meant the wrecking ball to these old buildings they thought of as decrepit old buildings that we now call townhouses. Brownstone Revival Coalition holds seminars, including this one, and we also send out an occasional newsletter. It’s really going to be turning more into an Internet publication soon. If you would like to join, tonight for $20.00 you can join. Also, if you do support us, even if you just give your name and a few dollars, it adds another name we need to keep for our non-profit status. So, we appreciate that. There is probably a form there attached regarding Brownstone Revival Coalition.

Our team, in the back there, Cathy Connolly, Khatera Ahmad, and then also Nicole Green. Thank them for putting this together. You can talk to them afterwards if you have any questions.

So, I’m going to focus on the West Side, talking about townhouses, and Jonathan will talk about other parts of the city and the overall market, as well.

At Vandenberg, we collect data on all townhouses on the West Side throughout the year, and virtually all of these buildings were built between 1890 and 1910, mostly for the so-called “middle class.” Most did not remain as single-family homes. They became two, three, four, and as many as 15 tiny apartments in a single brownstone, as you know. Why this matters is that when it comes to preparing data, and Jonathan is really the expert on this, it is hard to figure out with a townhouse. It might say 15 units on the C of O, but somebody changed it to a single-family a few years ago, and it’s not listed in the books that way. So, at Vandenberg we go inside every one of these. We know all of the houses, so when it comes to preparing a West Side report, we can be accurate. We found that, of course when you do that, there always are statistical anomalies. I will talk about a few of those tonight. one of these occurred is a few years ago. We had sold three houses up on Manhattan Avenue, for very good prices for that location, 105th Street, but those prices pulled down the Upper West Side average. So one of our competitor’s, who was one of the three big companies, talked about how the market was up that year, except for the West Side. Those three sales, and I have to take responsibility for them, because I did those sales, brought the market down on their statistics.

It is now seven years that we have been collecting data on the Upper West Side houses, and it was unnerving for a few years there, as we realized that every single year, there were 55 townhouses that sold. The way we count townhouses, they have to be over $1.5M in price and we exclude the commercial sales and group sales, family transfers, that sort of thing, so we can try to get an accurate report. In 2007, there were more; there were 69 transactions. Last year, and as you all can guess, there were a lot less; there were 40. Most of those 40 sales happened in the first half of the year. The second half of the year, there was not a lot of activity. That was down 27% from our, what I call our “base line” of 55 transactions that we expect to have on the West Side in a year. This year is down further. We have 8 closings that we count so far this year, and there should have been 16 or more, so we are at maybe 50% or less than 50% of the sales volume that we would normally expect at this time of the year. We think that is changing right now. There has been an up-tick in the last month or so, and we are optimistic that that is going to hold.

I’m going to take a few more minutes here to talk about this seven-year period and how the prices have moved. Every year, the prices have gone up, starting in 2003, and I will just read off the numbers up through today: $2.8M was the average price in 2003, the next year $3.3M, next year $3.6M, the next year $4.1M, the following year $4.8M, and then in 2008, we were up slightly more than that at $5.1M, and that is with less transactions, but still our prices were up slightly. Again, a number of those sales happened before the latter part of the year when sales dropped off.

So far in this year of 2009, if we include all eight sales, the price is up again at $5.6M as our average. That has to have an asterisk next to it, though, because there were only eight sales, but also because one of the sales is very high, for $15M. Without that sale, and I will talk about that sale in a little bit more detail in a moment, if we excluded it, the average sale price so far in 2009 would be $4.3M. At that $4.3M represents a 15% drop down from last year, not a 30%, but 15% from 2008 sales. I say not 30% because I have seen it so much around, people talking about the market being down 30%. I will have a few more words to say about that in a moment, too. Our price per square foot rose each year, and it is still higher this year, just over $1,000.00 a square foot. If we exclude that one sale, we are down about 15% which is $834.00 a square foot. Our activity has picked up in the last several weeks. We now have four townhouses in contract, and whenever we have four townhouses in contract in our office, we are happy, because that is our little mini-indicator of what is going
on with the market.”

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