New York: Struggling but Still Hoping to Dodge the Hit of Foreclosure

The higher you go, the harder you fall.

That is what New York is currently experiencing. The main fuel line of New York, Wall Street, is going dry. How hard could this affect their high-end lifestyle? Could New York homes be in foreclosure too?

The city’s economy depends on Wall Street. With Lehman Brother’s sudden closure, and Merrill Lynch and Bear Sterns’ crash, city life would be tougher.

The economic slump downed New York home prices down by 40 percent in the fourth quarter of 2008. Average home prices fell 3.6 percent. Even metropolis is scared of repossession.

An 8.6 percent price decline was observed through the S&P Case-Schiller Home Price Index. A 21 percent decline is still expected for the next 4 years. Goldman Sach’s even predicts a 44 percent fall on home prices.

65,000 jobs lost in the last three months of 2008, and the unemployment rate leaping to 7.4 percent. More are rethinking the thought of purchasing a new home. Anyone can lose their job, so anyone can also lose their homes to repossession.

New York’s struggle does not end there for even the city budget will be cut by $1 billion. Mayor Michael Bloomberg decided to cut down the city funds to strengthen its tax bases for it expects a $4.1 billion drop for 2009.

The Miller Samuel firm said that the financial bust may be felt harder in New York than in any other city because it is more exposed to the fall-off.

With all these, New York tries to be optimistic. They are glad they did not have the overbuilding that the Sun Belt has.

There is this urban shift that keeps the housing hope high. Comptroller William Thompson studies show that high income families would still rather live in cities like New York. The rampant repossession seems not to scare them.

Optimistic? Yes. But with billions lost, businesses, real estate and other industries will definitely suffer. Foreclosure is already looming. Hopefully New York can pull through and try to regain the top status.