Over the past decade, it seemed that Russian oligarchs and Chinese tycoons were buying up all the plush New York City real estate, right down to the iconic Waldorf Astoria Hotel, which a Chinese conglomerate is now turning into luxury condos.
My, how times have changed. This year, 6sqft reports, new restrictions on foreign buyers combined with a perception that the United States is no longer a friendly market have caused a major shift in real estate buying in New York and across the country. Over the past 12 months, the biggest sales in the city have all been to American buyers, led by hedge-fund gazillionaire Ken Griffin’s record-blasting $240 million purchase of a luxury condo at 220 Central Park South. Never mind, as we reported earlier this week, that many of those high-dollar investments turn out to be money losers.
Since we’ve debunked the myth that New York real estate is a gold-chip investment, let’s debunk another. Yes, Chinese buyers were atop the foreign buyer list, according to a 2017 report published by the National Real Estate Association, but Russian oligarchs were not the runners-up. Canadians were, spending $19 billion on U.S. real estate between 2016 and 2017.
As for New York City, the impact of foreign buyers has been in rapid decline since 2017. Today, both the luxury and affordable markets are dominated by domestic buyers, and most industry insiders agree that this shift is good news for American bargain hunters across the market. Sellers have been cutting their asking prices at the top end of the market for a while, and now the trend is spreading.
“We saw [price cuts] coming 18 to 24 months ago, but the impact is now beginning to trickle down to into Manhattan’s lower-end market,” says James Morgan, an agent at Compass. “I can’t speak for Brooklyn, where the market is quite different, but in Manhattan, what’s happening isn’t just impacting the luxury market.”
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