By The Terrace Experts at Brown Harris Stevens
As of the end of 2022, the average price of terraced homes in New York City was 116% more than non-terraced homes ($2,137,854 vs $4,574,844), underscoring the value and resilience of terraced properties on the market.
Last year was a complicated one, as each of us continued to determine our own home vs. office work schedules. As a society, we settled into the “new normal” of living in a time where COVID-19 no longer ruled us, but we all remained aware of its risks.
That said, there is no rest for the weary. Just as our personal lives started to get back into a groove, we were thrown a monkey wrench in the form of several significant mortgage rate hikes.
The immediate response of buyers to these hikes was to wait and see. However, as soon as the effects of the rate hikes on property pricing were known, buyers re-entered the market…cautiously. After all, everyone still needs a place to accommodate the new “normal,” and while higher rates
are temporary until refinancing is brought into the picture, the discounted purchase price is permanent.
When all the dust settled, there were 713 terraced homes transacted in Manhattan (12% less than in 2021) for a total of $3.3 billion (an 18% reduction over 2021). However, because the average transaction size went down by only 7% (to 1,871 sf), this resulted in a net increase in the universally accepted yardstick for real estate value: price per square foot (PPSF).
In addition, at the time of this writing, there are an additional 113 terraced homes in contract. Their average PPSF might be as high as $2,537/sf, suggesting that the value increase is ongoing.