Impact of Greek Crisis on Real Estate

here are the 2 biggest threats I see from this sov debt issues trickling to local markets (its not direct, it will be an indirect ripple effect), which I noted as one of my top concerns for 2010 in the predictions piece:

1. Strength of rising US dollar - how much do foreigners purchase power decline as the dollar rallies against other major currencies and how do speculative foreigners handle the now 'more expensive' US asset as a speculative investment? We all know how the weaker dollar affected psychology of foreigners, well how does the reverse affect confidence/psychology?

2. Global equities tied to local markets - how do US equity markets react to global sov debt concerns? Can it lead to a 10%, 15%, or 20% adjustment after a 75%+ rally in stock prices? If so, how does this affect confidence for buyers in our markets? A small decline is nothing, it has to be a noticeable and sustained move down to have any effect on the mindsets of consumers across a broad range. A 15-20% adjustment in equities certainly will make many buyers with portfolios rich in equities feel less wealthy

just my two cents..other issues I dont think will really enter the minds of buyers in our markets, who happen to be the ones putting in the bids and signing contracts

The threats of contagion are real. There are also some benefits to the US, and in turn our economy, and in turn the NY real estate market. The most obvious affect of the Greek crisis so far has been a weakening of the euro versus the dollar. This has led to foreigners buying us treasuries keeping our borrowing costs low at the time we need it most. The 10 year treasury has risen recently yielding only 3.6% now, down from 4% a few weeks ago.

banks also have been very big buyers of treasuries lately, borrowing at zero and then buying treasuries. i guess its better than lending to a business or consumer that may not repay

Euro's problems are a huge boost to the U.S. dollar short term. Greece is too small a country to really have much effect in the world. The real problem is speculating on which Euro members are next. Spain?

nyc the beta play on global gdp?!?

Mortgage spreads to Treasury is almost at the high of the year. 68 bps. We were as low as 50 bps back in March.

To jamba: yes it is. NYC as a whole less so, but Manhattan is, or at least was during the recent real estate bubble.

Although much of the run up in prices was due factors that we all dicussed in other threads, but wall street was a huge beneficiary of global economic expansion + think of all the foreigners who bought here.

i'm not going to get into it, but i think you should double check your metrics. i think you are taking some serious leeway in saying that