Out-of-Towners Snapping Up CIty Homes, Squeezing Local Buyers

The out-of-towners are coming! The out-of-towners are coming!

Buyers from outside the five boroughs accounted for nearly one-quarter of home sales in New York City during the first half of 2024, with buyers from California leading the invasion at 13.4%, followed by Florida (12%) and New Jersey (6.5%). This trend, revealed in a new report from the research firm PropertyShark, is happening even as the number of foreign investors has plummeted. And in this tight real estate market of low inventory, high prices and relatively high interest rates, it's making it harder than ever for New Yorkers to find homes they can afford.

The report found that people from outside the five boroughs 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. Meanwhile, foreign buyers made up just 0.3% of home purchases in the first half of the year, down from more than 1% in 2014.

“Their spot has been taken over by investors [and] home buyers from other states,” report author Eliza Theiss, senior writer at PropertyShark, tells Gothamist. She adds that 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 — 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.

Additionally, state and federal laws have brought transparency to limited liability companies that many foreign investors once used to shield their identities when buying real estate in New York City. 

“In the grand scheme of things," Theiss says of the decline in foreign investment, "it's just the overall economic environment and a lot of geopolitical stuff.”

Floridians accounted for the largest share of luxury purchases — above $3 million. Real estate consultant Jordan Barowitz says 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 says. “If you’re a prosperous Midwesterner with a kid moving to New York City, the economics of that deal are pretty smart.”

Smart for that Midwestern buyer, maybe, but painful for a New Yorker looking for a new apartment.