Cheaper rents may not be cheap enough

The entire world is in a state of economic downturn. China plans on pumping $586 billion through an economic stimulus package. Iceland is in a state of “hell has frozen over and we really need to get the heck out!” type of situation.

And as the economy lowers our demand for gas prices here in NYC – prices are dropping at the pumps – latest was $2.55 per gallon.

But what surprises me is that real estate prices in the city are not budging—at least not until now. The latest data shows that neighborhoods like the East Village, Midtown West, Hell’s Kitchen and Harlem are seeing significant overall drops in pricing. According to the linked article, real estate agents in NYC now encourage their clients to price 10 to 15 percent lower than a year ago.

This is not the whole story. Due to the situation presented with the highest unemployment rates of all time, people like Danh Le are getting rid of their apartments and trying to find cheaper ways to survive. He is in search of a place to live for $100/month. An excerpt from his craigslist post:

I want to get rid of my expensive rent and be semi homeless. Obviously there are a lot of risks so I’m wondering if there’s anybody out there willing to lower my risks with a certain place to stay. I know the economy is bad so maybe you would like some extra money. I want to believe that there are people who are willing to help a person in need. I have up to $100 to spend on housing a month. Could I sleep outside in your backyard?

And as we all know, 30 is the new 20. More and more kids are staying at home with their parents, especially in the NYC area than ever before. The situation is difficult but if we’re as determined and positive as some of our friends over in Iceland, we too can overcome this awful economy.

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