New York City is arguably the most international city in the world. It attracts people from all walks of life, industries, cultures, and income brackets. In the past decade, the global luxury real estate buyer has become one of the most important factors in the city's condo sales market. Whereas international buyers used to make up a few percent of buyers, they now make up double digits.
In the past year, I've sold at least 20 apartments to international buyers, including parents buying for children going to college, executives who prefer to live in an apartment rather than a hotel suite, and investors looking to diversify their portfolio of assets.
So, while everyone in the real estate world talks about the impact of who our next Mayor may be and how the result will affect the market, nobody seems to be paying attention to something as impactful and important to our market.
The US dollar
In the past six months, we have witnessed trust in the dollar erode and the brand of America become less valuable. Khartik Sankaran has a really in depth article on that here.
He says, "A weaker dollar raises the cost of living, shrinks geopolitical leverage, and chips away at the safety net while making it harder for people to understand why things suddenly feel worse".
Moody's stripped the US of its AAA rating, and "Liberation Day tariffs" have led to a sharp weakening of the dollar and momentary spiking of Treasury yields. It is estimated that Asian countries could decide to reduce their exposure to US assets to the tune of $7.5 trillion.
A weaker dollar means that buying something "Made In America" is cheaper for international buyers. And that includes condos. A 10% dip in the dollar means that the $1M condo the international buyer will be purchasing for their kids just became a lot less expensive, as will their tuition.
So, while it'll be more expensive to visit Europe and drink this summer, it'll be cheaper for people to buy a piece of America. This weakness in the dollar will drive more international buyers to the shores of Manhattan.
Most international buyers are focussed on how much they can buy with their currency and less about who the next Mayor will be.
Let's do this!
Shaun