Trying to decide between buying a condo or a townhouse? You may have a sense of which one you prefer in the abstract. Typically laid out in one convenient level, condos are great if you prefer to avoid stairs and don’t mind living with neighbors above and below. Condo buildings usually come with amenities, and tend to be located in the midst of a bustling area, with shops, restaurants, and businesses nearby (sometimes on the ground floor, even).
Townhouses, meanwhile, offer a more hybridized experience combining the perks of a single-family home with those of community living. They tend to have more square footage than a condo, multiple floors, and private outdoor space. Townhouse neighborhoods sit on more land and thus may be further away from commercial districts, but they have more of a neighborly feel.
Of course, you wouldn’t make the decision without considering price variables—and the factors driving prices associated with condos and townhouses are quite different. “Every buyer has their own specific needs, and every block and building is different,” says Oliver Brown, a broker with Corcoran’s East Side office.
Below, a comparison of the different factors driving costs for condos and townhouses.
Sales price vs. price per square foot
Generally, expect to pay more for a townhouse than a condo, for a couple of reasons: Townhouses tend to be larger, and at the highest end of the market, there are one-of-a-kind townhouses that go for $80 million or more, driving up averages.
According to data provided by Corcoran, in 2019 the average condo sold for just under $3 million, and was 1,400 square feet, while the average townhouse sold for $9.8 million and was 5,200 square feet. Though buyers spent more to buy a townhouse, the average price per square foot was nearly identical: $1,807 for condos, and $1,831 for townhouses.
A number of variables can drive prices higher or lower than average.
“It’s hard to generalize,” Brown says. “It depends on finishes, location, beauty, and other factors. Rarity drives up costs as well. You’ll pay a premium for a penthouse condo in a prominent building, or a townhouse on a particularly desirable block.”
By way of example, Brown cites two recent sales that flip the average narrative: A seven-room, 4,500-square-foot Lenox Hill condo at 838 Fifth Ave. that went for $27 million, or $6,000 per square foot; and a nine-room, 7,000-square-foot townhouse on the Upper East Side that sold for $23 million, or about $3,400 per square foot.
Carrying costs and taxes
Here’s where prices really start to differ between townhouses and condos.
Property taxes are determined by a number of different assessments, including square footage, number of rooms, acreage, and comparable homes nearby. When considering taxes, it’s useful to remember the categorical differences between condos and townhouses: With the former, you only own (and thus only pay taxes on) the inside of your apartment and an undivided interest in the building’s common elements, whereas if you buy a townhouse, you’re responsible for the whole shebang, including all of the taxes on the land outside and beneath your home.
While you may pay more in taxes for a townhouse than a condo, the numbers even out once you consider common charges you’ll pay in a condo—that is, the shared expenses for operating the building, which are not included with property taxes for condos (unlike with co-ops).
In Brown's example, he says taxes for the townhouse were $10,000 per month, compared to $9,000 for the condo plus an additional $12,000 in monthly common charges. Those common charges go toward building maintenance and support staff, like the doorman, porter, security, dry cleaning pickup and drop off, garbage collection, package and luggage storage, gym staff, and so on.
Operational costs are lower for townhouses, because you’re not paying salaries. It’s cheaper to pick and choose services à la carte, but it can be more of a headache.
“Doorman and elevator men and porters and supers and cleaning people are paid well. They’re union,” Brown says. “Whereas for a house, it’s per-service and/or hourly. Everyone does their own thing.”
That manifests as different lifestyles between townhouse and condo living, which—with negligible cost differences in the end—is really the question to ask yourself when choosing between the two. Do you want the convenience and security of a condo, or the personality and privacy of a townhouse?
In a house, you can hire your own staff, if you’d like—a nanny, a cook, a driver. Or you don’t have to hire anyone. Let’s say you or someone who lives in the home likes to garden; that means you don’t need a gardener. Maybe you have a friendly elderly or self-employed neighbor who can pick up packages for you; voila, no need for a courier. But some people prefer the ease of paying a flat fee for all services and operational costs without the hassle.
“You don’t have the same carrying charges for a house, but you have to deal with all these things—heating, cooling, security, sidewalk cleanup, having no super in the basement if something breaks,” Brown says.
There are tradeoffs everywhere: condos may seem safer because of 24/7 security at the door, but they have far more people coming in and out than a townhouse. In a condo, there’s always someone on-site to deal with anything that goes wrong; you don’t get that perk in a townhouse without paying a premium for it, but that’s also an opportunity to save.
If you’re buying a townhouse but you still want the lock-and-leave convenience of a condo, a good broker will connect you to a management company that can organize and take care of all services and maintenance. Or you could look for townhouses that include big-building perks, like 347 State St., which comes with gym, pool, and doorman privileges from the full-service 200 Schermerhorn St. next door.
Resale value
Townhouse resale values are more affected by contextual factors like the overall health of the neighborhood, the attractiveness of surrounding property and businesses, and cultural trends. The condo market can fluctuate due a broader range of variables. Right now, the condo market is oversupplied, with foreign buyer activity down, increases in mansion and transfer taxes, and talk of a pied-à-terre tax. That could be a sign to stay away, or to buy before the market corrects itself and prices start rising again.
If you’re buying a brand new condo, you’ll typically pay a premium for it, and there are many, many more new condos built each year than new townhouses, simply as a function of space. According to data provided by Corcoran, the median resale condo price in third of 2019 was down 12 percent from last year—the continuation of a multiyear trend, accelerated by the increase in mansion and transfer taxes. So if you’re buying in a new development, you probably won’t be able to sell it at equal or greater value until the market rebounds.
“It all comes down to your situation,” Brown says. “Everyone has their own specific needs.”
Condo, co-op, or townhouse, Corcoran knows home. Visit corcoran.com today.
