We experimentally study the polarization dynamics (orientation and ellipticity) of near infrared light transmitted through magnetooptic Yttrium Iron Garnet isolator crystal pairs using a modified balanced detection scheme. When the pair separation is in the sub-millimeter range, we observed a proximity effect in which the saturation field is reduced by up to 20%. Calculations using a 1D model suggest that the proximity effect originates from magnetostatic interactions between the dipole moments of the isolator crystals.