Yahoo Finance’s The Daily Ticker produced a report today, April 7th, highlighting the fact that the high-end real estate market in several U.S. cities had been hurt by the ongoing Russia/Ukraine crisis and the sanctions that have been levied against wealthy Russians. Julie Satow, who wrote an article in The New York Times on the topic, was interviewed for the report.
“Afraid to do business” in the U.S.
Satow mentioned that she had spoken to a Russian who said that many were “afraid to do business” in the U.S. right now because of the tense relationship between the two countires. She also mentioned speaking to a New York real estate agent with a client who was a member of Russia’s parliament and “was looking for a $25 million-$52 million purchase and he sent [his realtor] an email after the invasion saying ‘I’m sorry. I’m pulling out.’”
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Russian buyers might look at lower-profile real estate
Even if the sanctions on Russia continue for some time, Satow says it is likely only a “momentary freeze”, and there is a good chance that Russians will start buying U.S. real estate again. She also goes on to suggest the safety of the American market will eventually bring in “more buyers…but they may not want to do the super high profile penthouses.” Satow goes on to say that Russian buyers are now more likely to purchase “conservative” $2 million or so apartments that won’t draw media attention.
Foreigners represent a large chunk of the high-end real estate market
Although exact figures for Russian buyers are not available, Satow says at least 40% of the New York real estate market is foreign buyers and 50% of new construction in the Big Apple is purchased by overseas clients. She said U.S. real estate buyers come from many countries, but most realtors seem to think the Chinese and the Russians have been the most active in the U.S. property markets over the last few years.