Local Buyers Dominate New York Housing Market, Foreign Clients Drop
With the start of the new year comes newly-set expectations, and for the New York housing market, consistency seems to be the key.
According to Frederick Warburg Peters, the president of Warburg Realty, the main drivers of the real estate market for this upcoming year, like previous years, will be local clients.
“New Yorkers tend to be the bulk of purchasers in New York and that’s been true as long as I can remember,” said Peters.
While local buyers have run the market, the most recent numbers indicate a decline in the total amount spent by international clientele.
In a report released in 2015, the National Association of Realtors (NAR) reported that the unit sales of homes purchased by international clients decreased by 10 percent between April 2014 and March 2015.
One reason for the decrease may be the number of hoops foreign buyers have to jump through to purchase a property. Specifically in New York City, foreign buyers have many steps to go through to purchase properties like co-op apartments.
“Buying a co-op is something like joining a country club,” Peters said. “You need letters of reference, you need financial statements, you need money in this country. You need a lot of different things that most foreigners are not too enthusiastic about.”
Among the international buyers, Chinese clientele purchased the most U.S. property and spent the most overall in the 12 months ending March 2015. According to same 2015 NAR report, Chinese buyers beat out totals spent by purchasers from Canada, India, Mexico and the U.K.
When it comes to how these clients buy properties, Peters said purchasers from China usually spread out their investments.
“In my experience, our Chinese buyers tend to be more conscious of spreading risk, which means that they will often take the amount of money they’ve decided to invest and divide it among two or three properties, perhaps in different buildings or in different locations so that if one part of town maybe decelerates a bit in appreciation, that won’t be happening in the same way in another part of town.”
In today’s technology-dependent business environment, firms from all sectors of the marketplace have been adopting digital means to make themselves relevant and available to customers. Peters says that while Warburg Realty has been making investments in technology, personal relationships with customers will always be the company’s main focus.
“We see our commitment to technology as making our lives as agents and the lives of our clients easier and more smoothly flowing, but we expect the relationship which is at the center of the transaction to continue to be a person-to-person relationship.”
Frederick Warburg Peters on projections and trends for 2016
Frederick Warburg Peters on the impacts of technology in the real estate industry