All-cash transactions are becoming the norm for buying homes in Manhattan.
A New York Times analysis of more than 100,000 real estate transactions reveals that cash is increasingly the preferred payment method for homebuyers in New York City. In April, 64% of home sales in Manhattan were conducted entirely in cash. The Times analysis was based on data from Marketproof and ATTOM.
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The figure is nearly double the national average for major U.S. metropolitan areas, which saw 39% of deals paid for in cash. It represents a significant increase from 2022 before interest rates began to rise.
Two main factors are contributing to the surge in all-cash purchases:
- Rising interest rates: High borrowing costs make using cash more attractive. Buyers can avoid the additional expense of interest on a mortgage.
- Competitive market: With low housing supply and high demand, buyers are looking for ways to make their offers more enticing to sellers. An all-cash offer eliminates the financing contingency, making the sale quicker and more certain for the seller.
"You have a lot more power when you're all cash," Brown Harris Stevens CEO Bess Freedman told The New York Times. "People are wielding that now."
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The all-cash trend isn't limited to Manhattan's ultraluxury market. The Times reported that the biggest increase in cash purchases between 2021 and 2023 occurred for apartments priced at less than $3 million. This suggests that a wider range of buyers feels the impact of rising interest rates and a competitive market.
All-cash transactions are becoming increasingly common across the Manhattan real estate market, spanning affordability levels. Data shows a rise in all-cash purchases at all price points, from studios priced under $3 million to luxury penthouses.
While cash offers are now standard, they are especially prevalent in the high-end market. In 2023, 80% of Manhattan properties sold for $10 million or more were all-cash transactions. This compares to 66% of properties priced between $3 million and $10 million. The percentage of all-cash sales decreases slightly at lower price points but still remains significant, reaching 54% for properties less than $1 million.
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