New York real estate tumbles as Wall Street layoffs hit home

In Manhattan, ground zero of the global credit crisis, the housing market is beginning to feel the effects of the disaster that Wall Street helped create. While condo prices have risen slightly over the past year, sales volumes have plummeted, and many analysts predict that New York is feeling only the first tremors of what will eventually be a historic real estate meltdown.

According to CNN Money, in the first quarter of 2009, the median price of condos and co-ops in the city rose six percent over the previous year. While this would be a reasonable gain in almost any market, it is a major slump for a city in which double-digit yearly price increases have become the norm. Beyond that, one of the major factors keeping the real estate market afloat is the fact that apartment size is increasing; figure that in and over the past year the price per square foot has actually dropped by more than two percent.