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Forecast: New York metro home prices will drop another 40%

Posted by: Prashant Gopal on June 18, 2009

Home prices in the New York metro area, including Westchester County and northern New Jersey suburbs, could fall 40% from March levels, according to Deutsche Bank analysts. Quoting the report, said that the main reason why prices are likely to fall so drastically is that the area’s home prices are still so high.

Unlike other pricey cities, such as Los Angeles, New York home prices only began falling recently and might have a long way to go.

If this report is true, it might be time to sell your Manhattan co-op and find a nice pad in California where the housing market is probably much closer to a bottom.

Reader Comments


June 19, 2009 5:35 AM

Comparing the miserable NY metro market with California's, Gopal is trying to trick BW readers into believing California housing market is near bottom. Gopal's real purpose is to persuade BW readers that California real estate has hit bottom. This is another example of his self-serving agenda masqueraded as journalism. He could have cited the collapse of dairy prices as the leading story before launching into his propaganda. With their mortgage up-side down and ARM adjusting upward, all the "Flippers," including Gopal, are issuing propaganda that the California real estate has reach bottom in the hope salvaging the remainder. Inflated for over a decade by Flippers and “Liar” loans, prices of California real estate is still over priced and will decline further in the coming years. Unlike the tulip and dot-com mania, the California real estate bust is less liquid and will require more time to deflate. By passing various laws and schemes to help homeowners stay their homes, both the Federal and State have been trying to slow down the avalanche of foreclosure filings. Until the free market is allowed to clear out the Flippers, the Gopal, and other unworthy homeowners, there is no bottom in sight.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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