Can/will this happen in U.S.?

maybe? The reality is that Tel-Aviv and NYC are very close in term of real estate cost, 3 beds in tel aviv in a luxury building can be around 3 millions.What amaze me about Israel is that 100 years ago there were swamps there but now it's one of the strongest economy, unemployment of 6%....

Why can't they just move to more affordable cities?

I can't wait for all of the tent cities to pop up in Central Park on August 3rd after the teabaggers force us into default.

And just how will a U.S. government default result in New Yorkers losing their apartments overnight?

I've my tree all picked out in Central Park to build my triplex treehouse in...

Interest rates will shoot up and all the hipsters with AMMs will be f*cked.

*ARMs*

As will my business...

1 - I can't wait to see what alanhart has to say about this one.
Recently I googled alanhart, and he seems to have a lot of opinions. http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=alanhart

2 - We already have protests in NYC regarding costs. Usually down by City Hall or around Wall Street. Nothing new, welcone to NYC.

"Interest rates will shoot up ..." so price will go down , right?

"Interest rates will shoot up and all the hipsters with AMMs will be f*cked."

And they can't move into rentals because .... ??

Because half them will not have jobs. Look at all the companies that recently aunnoced mass layoffs.

Just completing a 3 week stay in Israel - cost of living issues, middle class pressures very similar to NE US cities. It was amazing to see first hand how quickly this developed and how absolutely wide spread it has become. Tent cities in NYC are certainly possible - only caveat - no rain here until Oct/Nov

"Because half them will not have jobs. Look at all the companies that recently aunnoced mass layoffs."

But the Obama Administration says we're in a "recovery." The recession is over! Woo hoo!