Cash is increasingly king in the Big Apple.
According to a new analysis of more than 100,000 NYC real estate deals by the New York Times, so many buyers are paying for homes in all-cash transactions that it’s become the standard way of buying homes across Manhattan.
This April, 64% of the borough’s home sales were all-cash. That’s almost double the number in large US metros (39%), and a much larger difference than just two years ago, in 2022, before interest rates initially spiked, the publication reported. The Times analyzed data from Marketproof and ATTOM.
The trend is significantly a result of high mortgage rates, which incentivize homebuyers to use their savings rather than borrow money from the bank. As well, low housing supply and high demand means that buyers are eager to stand out to those selling their properties, including by promising immediate cash payment.
“You have a lot of power when you’re all cash,” Brown Harris Stevens chief executive Bess Freedman told the Times. “People are wielding that now.”
And the all-cash shift isn’t just happening among the city’s wealthiest circles and highest-priced transactions. The biggest jump in cash purchases between 2021 and 2023 was among apartments that were priced less than $3 million, the outlet reported.
On either end of the affordability spectrum, though, all-cash transactions are now a common sight. In February, the lowest cash closing in Manhattan was for a $250,000 studio and the highest was for a $10 million-plus four-bedroom duplex.
While cash is now the norm at every price point, among the most expensive sales it’s closer to an expectation. A total of 80% of 2023 Manhattan home sales in the $10 million or higher bracket were all-cash. During the same period, 66% of $3 to $10 million sales were all-cash. That’s compared to 62% of $2 to $3 million sales, 57% of $1 to $2 million sales, and 54% of sales amounting to $1 million or less.