Not long ago, foreign buyers were snapping up New York City real estate at a rapid pace, but over the past year, sales activity has cooled. With low inventory, high prices, and a strong U.S. dollar, international buyers have eased off the gas. Some may also be hesitating due to the upcoming election, opting to wait and see how things unfold in November.
The National Association of Realtors (NAR) reported a 36 percent year-over-year drop in U.S. real estate sales by foreign buyers. In New York City, the decline is even more pronounced, though it reflects a different reporting period. A recent PropertyShark report reveals that international buyers represented just 2.25 percent of NYC home sales in the first half of 2024—a significant decrease from ten years ago when they accounted for 10 percent.
Adding to the shift is the rise in out-of-state buyers from across the country. In the first half of 2024, only 77 percent of NYC home sales were by New York residents, down four points from a decade ago. This means 23 percent of home sales were by out-of-state buyers, primarily from New Jersey, California, and Florida. Connecticut and Texas residents round out the top five states for out-of-state buyers.
Interestingly, while New Jersey still leads in the number of buyers, their share has dropped from 28 percent in 2014 to 19 percent today. In contrast, the number of buyers from California, Florida, and Texas has grown over the same period.
In the luxury market, sales volume for the first half of 2024 was highest among three states. New Jersey residents led with $149 million in sales, followed by Florida at $141 million, and California at $139 million. Florida, California, New Jersey and Massachusetts were the only states whose residents spent more than $100 million.
This growing presence of out-of-state buyers, coupled with high interest rates, is making it increasingly difficult for local New Yorkers to compete in the current market. This may partly explain the decline in home purchases by local residents.
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