A recent analysis of real estate trends reveals that nearly 25% of home purchases in New York City during the first half of the year were made by buyers moving in from outside the five boroughs, despite a significant decline in foreign buyers.
According to a report by research firm PropertyShark, individuals with addresses from other states or counties acquired over 23% of one- and two-family homes, condos, and co-ops from January to July, up from about 19% during the same six-month period a decade ago.
Foreign buyers represented only 0.3% of home transactions in the first half of this year, down from more than 1% in 2014, the analysis indicated.
“Their role has been taken over by investors and homebuyers moving from other states,” stated Eliza Theiss, a senior writer at PropertyShark and author of the report.
Residents of New Jersey, California, and Florida accounted for the largest share of out-of-state home purchasers in New York, according to the report.
These findings come amid rising competition for the limited number of available homes in the city, which continues to drive record-high property prices. As of May, the median asking price in the city reached $1.12 million, according to StreetEasy.
New York City has long been a magnet for foreign investors, particularly in the luxury real estate and multifamily building markets. However, Theiss noted that the declining rate of purchases by foreign residents aligns with ongoing global uncertainties and the lingering effects of the pandemic on the housing market.
She explained that Russia’s invasion of Ukraine has led to fewer transactions by Russian citizens, while trade tensions with China may be discouraging Chinese buyers from moving into New York City. “In the grand scheme, it reflects the overall economic environment and many geopolitical factors,” she said.
The increase in out-of-state homebuyers, coupled with high interest rates, makes it harder for everyday New Yorkers to compete for available properties. Real estate consultant Jordan Barowitz mentioned that brokers are increasingly collaborating with affluent parents who are paying cash for condos and starter homes, which they then rent out or pass on to their children.
“Interest rates are still high, sale prices haven’t come down, and rents remain elevated,” Barowitz said. “If you’re a prosperous Midwesterner with a child moving to New York City, the economics of that arrangement are quite smart.”
Meanwhile, the decrease in foreign purchases in the city mirrors a national trend.
A report from the National Association of Realtors in July found that foreign buyers purchased 54,300 homes in the United States between April 2023 and March 2024, making up about 1.3% of the 4 million home sales during that period. This figure reflects a drop from around 107,000 homes purchased by foreign buyers three years ago and approximately 232,600 homes a decade earlier.
Around 4% of foreign homebuyers invested in New York, while another 4% bought homes in New Jersey, as found by the trade association. About 20% of foreign purchases occurred in Florida.
“Historically low housing inventory and rising prices are significant factors limiting home sales for both American and international buyers,” stated Lawrence Yun, Chief Economist for NAR.
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