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Non-New Yorkers are moving in on NYC’s housing market, report finds
By
David Brand
Published Aug 15, 2024
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Photo by Eduardo MunozAlvarez/VIEWpress via Getty Images
By
David Brand
Published Aug 15, 2024
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Buyers from outside the five boroughs accounted for nearly a quarter of all New York City home purchases in the first half of the year, even as the number of foreign buyers plummeted, according to a new analysis of real estate trends.
The report from research firm PropertyShark found that people with addresses from other states or counties purchased more than 23% of one- and two-family homes, condos and co-ops between January and July. That was up from about 19% over the same six-month span a decade ago.
Foreign buyers made up just 0.3% of home purchases in the first half of the year, down from more than 1% in 2014, according to the analysis.
“Their spot has been taken over by investors [and] home buyers from other states,” said report author Eliza Theiss, senior writer at PropertyShark.
Residents of New Jersey, California and Florida accounted for the highest number of out-of-state home purchasers in New York, the report found.
The findings come as competition for a limited number of available homes in the city continues to fuel record-high home prices.
Citywide, the median asking price reached $1.12 million in May, according to a report from listings site StreetEasy.
New York City has long been a magnet for foreign investors, especially when it comes to luxury homes and multifamily buildings. But Theiss said the declining rate of home purchases by foreign residents has occurred amid international turmoil and the lingering impact of the pandemic on the real estate market.
She said Russia’s invasion of Ukraine led to fewer purchases by Russian citizens while trade disputes with China may be discouraging Chinese citizens from buying homes in New York City.
“In the grand scheme of things, it's just the overall economic environment and a lot of geopolitical stuff,” she said.
The higher rate of out-of-state homebuyers, coupled with high interest rates, can make it harder for everyday New Yorkers to compete for available homes.
Real estate consultant Jordan Barowitz said brokers are increasingly working with wealthy parents who are paying cash for condos and starter homes that they then hand over or rent out to their children.
“Interest rates are still high, sale prices have not come down and rents are still high,” Barowitz said. “If you’re a prosperous Midwesterner with a kid moving to New York City, the economics of that deal are pretty smart.”
Meanwhile, the declining rate of foreign purchases in the city mirrors a nationwide trend.
A July report from the National Association of Realtors found foreign buyers purchased 54,300 homes in the United States between April 2023 and March 2024, about 1.3% of the 4 million home sales nationwide during that span. The number of homes purchased by residents of foreign countries or recently arrived immigrants dropped from around 107,000 homes during the same period three years earlier and from around 232,600 homes in the same period a decade ago.
About 4% of all foreign homebuyers purchased property in New York, while another 4% bought homes in New Jersey, the trade group found. About 20% of foreign purchasers bought homes in Florida.
"Historically low housing inventory and escalating prices remain significant factors in constraining home sales for American and international buyers alike," NAR Chief Economist Lawrence Yun said in a statement.
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David Brand
David is a reporter covering housing for Gothamist and WNYC. Got a tip? Email [email protected] or Signal 908-310-3960.
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