Wednesday, July 20, 2005

NY is Second Most Likely to Pop

A writer for Yahoo Finance, using data from PMI Group, a residential mortgage insurer, puts New York at number 2 on a list of overvalued cities likely to experience a real esttae price decline (what no number 1; we New Yorkers resent that). The article reads:

"2. Big Apple Bailout. Like Boston, New York City suffered through a housing slump in the '90s. But while job losses were the big problem then, now it's out-migration. "People from New York, especially baby-boomers, are moving out," says Yun. If the trend accelerates, it could cause a problem, particularly for the high end of the real estate market. Meanwhile, prices remain extremely high. The median price for existing homes in the metropolitan New York City area (which includes parts of Connecticut and New Jersey as well as Long Island and Westchester County) stood at $435,000 at the end of the first quarter of 2005, up 18% over the first quarter of 2004. PMI puts the risk of a price decline in New York City at 31% and says it's even money that prices on Long Island, where affordability is becoming a concern, will sink within two years."

Other overvalued cities were: Boston, Ft. Lauderdale, Washington, D.C. and L.A., none of which should come as a surprise to anyone following the national bubble.


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