In Manhattan Real Estate, Cash Is Everything

Across the country, buying a home in cash is increasingly common. In Manhattan, it’s become the standard.

In April, buyers paid entirely in cash for 64 percent of the homes sold in Manhattan, according to Marketproof, a provider of New York City real estate data. In contrast, cash buyers accounted for 39 percent of April sales in large U.S. metro areas, according to ATTOM, which provides national real estate data. (Manhattan was a similar outlier even within New York City.) The gap between Manhattan and the rest of the country has grown since 2022, when interest rates first spiked, making cash a more attractive option for those who have plenty of it.

In New York, “cash buyer” might bring to mind an oligarch who parks millions in a palatial apartment that sits empty most of the year. But a New York Times analysis of recent sales paints a far more expansive portrait.

Over two days in February, 52 of the 76 closings were in cash. Interviews with 28 buyers on those days and some of their agents, as well as a review of public records, revealed that the people paying cash were mostly American and often New Yorkers. They worked in health care, tech, fashion and the arts. Their ages spanned from the late 20s to the 80s. They got the cash by selling stock or a previous home, or from their parents, or from years of saving. The places they bought touched every corner of Manhattan, from the city’s most exclusive condos to its most affordable co-ops.

Notably, the highest rate of growth in cash purchases from 2021 to 2023 was among apartments under $3 million. For most Americans, spending even $1 million for an apartment may sound like an eye-popping sum, but the median sales price in the borough was $1.1 million in April, according to StreetEasy. Most of the apartments sold on Feb. 13-14 were listed for well under $1 million — the cheapest cash closing was a $250,000 studio.

The cash buyers necessarily had one thing in common: access to a lot of money. It’s a capacity that escapes most Americans, and even most New Yorkers, who find themselves priced out even more than usual with interest rates around 7 percent. While sales are down overall, prices have largely held steady because there are few apartments available to buy. As cash buyers extend their reach into the bottom of Manhattan’s market, they create another barrier for buyers who depend on mortgages. For many Americans, homeownership is the gateway to building wealth, and the overwhelming majority of first-time buyers use mortgages.

“You have a lot of power when you’re all cash,” said Bess Freedman, the chief executive of Brown Harris Stevens. “People are wielding that now.”

The Inheritors

Family money plays an outsize role in Manhattan real estate, and many of the buyers interviewed for this article relied, one way or another, on funds passed down from the previous generation. Americans aged 60 to 78 hold half of the nation’s wealth, and will pass on $16 trillion of it over the next decade to their children, in what has been coined the “great wealth transfer.”

“The baby boomers, some are passing on,” said Bruce Wayne Solomon, an associate broker with Douglas Elliman. Their estates are now in part “fueling the real estate market.”

Christen Genga, 50, a district manager at Forever 21, had never felt in a position to become a homeowner, with a modest income and graduate student loan debt. But then her mother died after a brief illness last summer, leaving her grieving, but with enough of an inheritance to consider buying.

She sank much of that money into a two-bedroom in Washington Heights for $369,000, paying cash in part to simplify the income-restricted co-op’s onerous approval process. Ms. Genga, who is divorced and has a 7-year-old son, sees an irony in the fact that without the windfall that accompanied the loss of her mother, she would not have had enough money to buy even in a building intended for people with modest incomes. “It almost has to be an inheritance,” she said. “It feels very weird.”

But she also sees the purchase as an opportunity to build generational wealth into the future. “Being able to have an apartment, and being able to leave that to my son,” she said. “It felt like a life dream.”

Parents are also helping their children while still alive. One mother who worked in fashion and later real estate bought a $250,000 studio apartment in Hell’s Kitchen so her child could live there during college, and after. And a Connecticut couple bought a $1.24 million two-bedroom in Murray Hill where their twins, both recent college graduates, now live.

Elizabeth Kipp-Giusti, 34, was able to use the money that her parents set aside for her to buy her first apartment a few months before she married. A native New Yorker who works for the Public Theater, Ms. Kipp-Giusti said the money had “no strings, other than we all had to agree that it was an apartment worth the investment.” The head start, she estimated, saved her the decade it would take her and her husband to save for a down payment.

She found a two-bedroom in a Morningside Heights building where, in her youth, she used to visit a family friend. She paid $939,000 in cash, slightly below list price. “To end up there as an adult feels like magic,” she said.

The High Earners

Many New Yorkers, still in the prime of their careers in lucrative fields, had saved enough to buy an apartment without bank assistance.

Jean Siao, 50, bought a one-bedroom condo on the Upper West Side for $772,500 as an investment, planning to renovate the unit and rent it out. A biologist at a pharmaceutical company, she wanted to diversify her investment portfolio. “My thinking has been: How do I move from stocks and bonds and interest-bearing savings to something else, to diversify?” she said.

Most buyers we spoke to were planning to use the apartments themselves. Felix Hu is a 39-year-old product designer who built savings mostly from his years working in tech. When a two-bedroom came on the market in the same Lower East Side neighborhood where he was renting, he offered $1.04 million, 5 percent below the list price. Mr. Hu didn’t want a mortgage partly because of high interest rates, but also because he’s currently working for himself. “I have a variable income depending on what work I’m doing,” he said. “So I figured it would simplify my life to pay all in cash.”

The high mortgage rates persuaded many people with enough cash to dip into their nest eggs rather than borrow money. Michael Falchiere, 31, bought a $555,000 studio in the same Chelsea building where he was already renting. Mr. Falchiere, a real estate salesman, said the money came from personal savings. While he considered taking out a mortgage, the monthly payments would have been significantly higher than what he was already paying in rent, and the interest he would have earned from keeping that money in savings wouldn’t have been enough to justify paying that high rent or a big mortgage. “It doesn’t really make sense to do financing,” he said.

The Boomers

While many baby boomers are passing their estates on to their heirs, others who have amassed a lifetime of savings are also spending their money on themselves, moving to the city for at least part of the year to enjoy its theater, music and museums.

Kathryn Korol, 76, a retired financial planner, has lived in Rochester, N.Y., her entire life, but had long wanted to have a second home in Manhattan. “It was my lifelong dream; I never thought it would happen,” she said.

“I had done very, very well in the stock market, and I wanted to get money out of stocks,” she said. In February she closed on a $552,000 one-bedroom in Gramercy Park. “I have an elevator. I have a doorman. I have a porter. I have a key to a private park,” she said. “I call it free assisted living.”

Jeffery and Susan Lee, 74, a retired pharmacist, have a home in California and grandchildren on both coasts. So they bought a $660,000 one-bedroom in Sutton Place, in the same building as their daughter, to spend a third of the year closer to their new grandson. “It was always going to be cash, given our age,” said Mr. Lee, 76, a retired dentist. “I like it clean and simple.”

In contrast, Suzy Lieber, a 73-year-old psychotherapist, had lived in Brooklyn for 50 years but was ready to sell her old apartment and move to Manhattan. She landed on an Upper West Side co-op that, because of its amenities and proximity to Lincoln Center and parks, was a magnet for older people, she said. Her offer for $913,000 was accepted over two other all-cash offers, she said.

But no slice of Manhattan real estate would be complete without at least one multimillion dollar purchase. The most expensive all-cash sale to close during those two February days was a four-bedroom, two-story apartment on the Upper West Side, sold for more than $10 million to a retired engineer and lawyer who had both worked in tech and live in California. The couple had not planned to buy a vacation home in New York. But they were so enamored by the listing’s old New York charm and the Central Park views that the wife flew across country the next day to see it. The couple outbid the competition with a cash offer almost 24 percent over the list price. They plan to use the home a few times a year, dropping in at least once a season.

Susan C. Beachy contributed research.

About the data

The Manhattan sales data in this article was provided by Marketproof, a New York City-based real estate data company. Many buildings in New York are organized as cooperatives, which do not record mortgage information. Marketproof determines the presence of a mortgage by matching property transfer tax documents and other filings to the sale record based on public information.

All the spotlighted individual sales are among those that closed on Feb. 13-14, according to Marketproof’s data. The data excludes closings recorded for less than $100,000, which are often property transfers, not sales.

The U.S. metro average for share of cash sales comes from ATTOM, a property data analytics company that collects and consolidates property data from across the country. ATTOM calculates this by averaging the percentage of single-family-home and condo purchases in cash for the top 20 most populous metropolitan statistical areas, excluding metropolitan areas in states where sales data is not public record, such as Texas.