This is a guest post from RPA agent Doug Holman, aka “Townhome Guru“:
Whew, townhome bashing seems to be en vogue these days. Like it or not, townhome builders and townhome buyers are here to stay. City officials want density and some semblence of affordable housing. Young, upwardly mobile, 20 and 30 somethings, along with downsizers, want urban centric, short commute, low maintenance homes. Builders will fill that void. Based on some of the blogging I’ve read, you’d think townhome buyers were some of the dumbest rocks in the garden. Which leads to my question. Are townhome buyers getting a bad deal? In hopes of answering my own question I’ve turned over a few statistical rocks to size up what buyers pay for as far as amenities. Here’s what I did. I culled sold townhome sales between June 9th and December 6th (about 6 months) for years 2005, 2006, and 2007. I did this for a MLS area known as 705 which covers an area north of Lake Union, south of 85th Street, and west of I-5 to the sound. This includes Greenlake, Wallingford, Ballard, Fremont and points in between. It’s a geographic area with plenty of townhomes along with plenty of single family homes, that my named demographic would likely consider a purchase target in addition to townhomes. I compared how many square feet were purchased, price per foot, average sales price and median price. I massaged the data in two ways. Not to prove a point but to minimize bad data. I eliminated any townhomes or single family homes where the builder or seller failed to include square footage information. I also only used single family homes that were a style “10,” or rambler, where footage figures most accurately represent actual living space and not unfinished basements. I eliminated a waterfront single family sale that was a data skewer. What I found was not surprising to me, or likely any real estate shopper who has spent a weekend fishing to see what $400,000 would buy. The 3 year, average square feet of a townhome sold in years 2005-2007 (June 9-Dec 6) was 1522 square feet. The average square feet of a single family home for the same 3 year period was 1161 square feet. It goes without saying that the townhomes had higher averages of bedrooms and bathrooms, typically 3 bed, 2 bath minimum versus 2 bed, 1 bath for the single family homes. I haven’t included those figures due to space constraints. Averages sales prices for townhomes in area 705 were 354,000 (2005), 433,000 (2006) and 412,000 (2007). That’s 240, 289, and 282 dollars per square foot. Townhome prices, by multiple metrics, are trending down. Average sales prices of single family homes in area 705 were 323,000 (2005), 373,000 (2006), and 409,000 (2007). That is 298,351,356 per square foot. Single family rooms were a relative good deal in 2005 but have jumped dramatically since. Conclusion. People pay for what they want. Townhome buyers sacrifice yard and elbow room for new finishes, more bedrooms and baths, for a square foot price significantly lower than single family homes. A per foot price that is trending down. Single family home buyers sacrifice some livable space, bedroom and bathroom totals for a bigger piece of terra firma, and the more traditional concept of home ownership. The price single family home buyers is still is trending up. I sell a fair number of townhomes each year so yes, I have a vested interest in believing in the product. And statistics will tell you whatever you shape them to say. I’ve tried to create an accurate comparison to two different choices available to the everyday Seattle buyer. A townhome is not the right lifestyle for me. I’ve got 3 kids under the age of 10. But for many it’s a great solution. It allows scores of individuals to get their foot wedge in the real estate door without committing to the suburbs before their time. To imply that these real estate shoppers are stupid or foolish en masse, is to tell them that they don’t know what they want. Closed sales from June 9th through December 6th, 2005, 2006, 2007, for new construction townhomes and single family (style 10 ramblers). NWMLS area 705. Closed sales without square footage figures eliminated. No less than 60 closed sales for any category.