NYC Home Prices To Fall 10%: Bloomberg

The city of New York released it's budget. "Mayor Michael R. Bloomberg today announced his Fiscal Year (FY) 2007 Preliminary Budget and presented an updated four-year financial plan for New York City. In the short term, New York’s budget is stable and strong. However, structural imbalance and large out-year budget gaps persist and not only threaten the City’s long-term solvency, but could force painful budget cuts and tax increases in the future." "For too long, New York City has not prepared for fiscal downturns and the ensuing budget problems they produce. We must seize this opportunity, marshal our current resources and work with our partners in government and labor to make the structural changes necessary to the City budget." "The City’s commercial occupancy rate is the highest in the nation. New York’s real estate market is expected to slow, however, with a 10% decline in home prices, a 14% decline in home sales over the next few years and a significant decline in real estate transaction taxes that have buoyed the City’s tax revenue in the last few fiscal years." "Despite the City’s strong economy and fiscal stability, significant risks exist in the out-years. Without long-term solutions to these recurring problems and structural shortfalls the City will be plagued by a continuous boom-bust cycle that invariably causes painful budget cuts and tax increases." "Extraordinary one-time resources, including increased real estate transaction taxes, the Personal Income Tax and delays in the City’s pension contributions have generated $3.5 billion in resources that will be used to reduce long-term costs to the City."