For years now major coastal real estate markets have been propped up by foreign buyers. That’s changing in the face of slowing global growth. The Wall Street Journal’s Laura Kusisto reports:
Real-estate agents said the pain from the foreign pullback is palpable when they try to sell high-end condos in Miami and New York or mansions in southern California and Seattle.
“Generally speaking, we are in the largest market correction since the Great Recession in New York City,” said Martin Eiden, a real-estate agent at Compass, who has had to cut prices on listings from Midtown Manhattan to Brooklyn in the last year.
“The foreign buyers have pretty much all but disappeared,” he added. “I’m helping a lot of foreign buyers get their money out of this country as fast as possible.”
Mr. Eiden said the impact has been felt most at the top end of the markets at ultraluxury residences like Manhattan’s One 57, a 75-story skyscraper known as “the billionaire building.” But it has rippled to lower-end purchases, such as $800,000 one-bedroom apartments parents were buying for children attending New York University. That has dried up as they now question whether New York is a safe investment given the slowing market.
Both nonresident foreign buyers and immigrants cut back on U.S. home purchases in the year that ended in March. The largest drop was in buyers from China, who purchased just over $13 billion worth of U.S. homes during that time period, a 56% decline from the prior 12 months.
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