Where will the mony come from?

Maybe we can flog this one some more. Family income rose steadily in America from 1969 - 2000 roughly between 5-8% per decade. 2000 - 2007 showed a modest decrease in income. 2000 - 2007 was also arguably the biggest run-up in real estate prices in America. Where did this money come from? Well it came from credit. Cheap and easy and irresponsible credit. In NYC incomes at the top did rise... [more]

Maybe we can flog this one some more. Family income rose steadily in America from 1969 - 2000 roughly between 5-8% per decade. 2000 - 2007 showed a modest decrease in income. 2000 - 2007 was also arguably the biggest run-up in real estate prices in America. Where did this money come from? Well it came from credit. Cheap and easy and irresponsible credit. In NYC incomes at the top did rise primarily from Wall Street and hedge funds raking it in due to loose regulation. This helped NYC. This booming tax base helped NYC become cleaner and safer than it's ever been. Now it's 2008 and there is no more easy and irresponsible credit although it is still relatively cheap. The gravy days of Wall Street are over for a few years at least and thousands of financial employees now have zero income. Even mom and dad's down payments will start drying up as they become more concerned with their own retirement versus whether their princess can live in the West Village. On top of it all the dollar is recovering relative to other currencies discouraging overseas purchasers whose influence has always been grossly exaggerated. It's like the economy was riding one long roid rage and is now suddenly off the juice. So the question is, without a significant increase in incomes where will the money come from to support the current prices in NYC and Manhattan in particular? Can anyone answer this question? [less]