Jasmine Moran and Leo Muellner were able to sell their one-bedroom apartment in Williamsburg, Brooklyn, after repainting it and lowering the price.

America shouldn’t waste the current housing crisis. With prices plummeting, foreclosures soaring and the mortgage market in disarray, the country should rethink a federal housing policy that has failed.

Wall Street is just about to finish the worst year since 1931. American housing markets are finishing their worst year in recorded history. New York’s economy is highly dependent on Wall Street; about 40 percent of Manhattan’s total payroll was in finance and insurance in 2006. These three facts should have created the mother of all price crashes in New York City real estate. Yet New York’s housing prices are doing remarkably well relative to elsewhere in America.

Buyers who signed on before the economy tanked want out. Lawyer Jerry Feeney says he used to get two new calls a day from people drawing up contracts; up to 40 percent of inquiries these days come from clients trying to abandon ship.

Though brokers and analysts say that prices on contracts signed in the last few months have fallen sharply, the decline has not yet worked its way into the official records. A review of city filings suggests that when the final reports on the fourth quarter of 2008 are released early next month they will show that average and median prices on closed transactions increased slightly over the previous quarter and held their own compared with the same quarter in 2007.

This year will be remembered in New York as the one when the real estate boom definitively ended. On the ropes since at least the summer of 2007—when the subprime mortgage crisis snowballed into a general credit freeze—the market, both commercial and residential, stood still by the fall of 2008.

Innovative homes pioneered in Germany approaches the challenge of energy efficiency by using ultrathick insulation and complex doors and windows. The architect engineers a home encased in an airtight shell, so that barely any heat escapes and barely any cold seeps in. That means a passive house can be warmed not only by the sun, but also by the heat from appliances and even from occupants’ bodies.

Manhattan now has an 11.8-month supply of unsold inventory, said Jeffrey G. Otteau, whose Old Bridge, N.J., company analyzes contract sales figures and advises real estate brokers. “This is not terribly big,” he said, “but it is significantly bigger than a year ago...

Nearly $5 billion in development projects in the city have been delayed or canceled because of the credit crisis, which has had similar effects nationwide. The setbacks for development — perhaps the single greatest economic force in the city over the last two decades — are likely to mean that the landscape of New York will be virtually unchanged for two years.

In an unusual move, President Bush on Wednesday reversed his decision, announced a day earlier, to pardon Isaac R. Toussie, a Brooklyn developer who pleaded guilty to fraudulently obtaining federally insured mortgages and to defrauding Suffolk County, N.Y., by selling it overpriced land.

Home sales plunged last month, and housing prices fell at their fastest rate in 40 years, the latest indication that America’s battered housing market will continue to struggle in a rapidly deteriorating economy.

Who knew a year ago that we were nearing the end of one of the most delirious eras in modern architectural history? What’s more, who would have predicted that this turnaround, brought about by the biggest economic crisis in a half-century, would be met in some corners with a guilty sense of relief?

The board of the Metropolitan Transportation Authority approved an austerity budget for 2009 that calls for painful cuts in bus, subway and commuter rail service and a steep increase in fares and tolls, all aimed at plugging a $1.2 billion deficit.

Having reduced its key rate to a record low, the Fed said that it would use “all available tools” to fight the recession and downward pressure on prices.

Gov. David A. Paterson will propose a $4 billion package of taxes and fees on a range of items, from sugary soft drinks made by Coca-Cola and Pepsi to luxury items like furs and boats, when he unveils his plan to close a deficit that has ballooned to $15 billion, people with knowledge of the plan said on Sunday.

How slow is the New York real estate market in this season of our economic discontent? Marketers and publicists now say they are happy if two or three buyers had signed contracts in the last month or so, and had actually handed over checks for the 10 percent down payments.

Instead of shunning the U.S., where losses on subprime mortgages in 2007 triggered a global seizure in credit markets, investors can’t get enough Treasuries. Investors flee risky assets around the world and put their cash into U.S. bonds paying, in some cases, nothing in yield just to ensure the return of their principal.

Fannie Mae is finalizing a national policy that will allow tenants to remain in their homes even if their landlord goes into foreclosure -- a landmark decision for tenants.

President-elect Obama has selected Shaun Donovan, the 42-year-old who has led the Department of Housing Preservation and Development since 2004, as his Secretary for the Department of Housing and Urban Development.

New York has become an interesting case study on the burgeoning collaboration between design and marketing. Corcoran Sunshine Marketing Group (Corcoran Group affiliated company) has been at the center of it. For better or worse, luxury residential real estate has dominated New York’s stake in contemporary architecture and high design, and continues to celebrate the (literal) value of prominent national and international architects.

The word from the top brass at Forest City Enterprises, parent company of Brooklyn-based mega-developer Forest City Ratner, is the firm is suspending all new development. That is, except Atlantic Yards.

Builders and Realtors are, of course, applauding the news that Treasury officials are considering a proposal to lower interest rates for new home purchases. But some financial analysts and brokers are less sanguine about the proposal.

The $800 billion infusion of federal funds into credit markets has an immediate impact on mortgage rates. Rates averaged 5.77% for the day on a 30-year, fixed rate loan, down from 6.06% a few days ealier. They fell as far as 0.75 percentage points on 11/25/2008, according to the Mortgage Bankers Association... That could save a typical home buyer more than $90 a month on a $200,000 mortgage.

Though the latest monthly sales numbers for existing homes were down slightly nationwide— 3.1 percent on a seasonally-adjusted basis— sales in some of the hardest-hit local markets are really taking off, according to the latest data from the National Association of Realtors.

At best, loan modification companies provide homeowners with a service they could get for free from their lenders or nonprofit housing counselors, says the U.S. Department of Housing and Urban Development.

House prices in Shanghai, Shenzhen and Guangzhou are plunging, and the global economy may grind almost to a halt next year because of it.

Over a decade of whirlwind development, the Landmarks Preservation Commission has repeatedly played dance partner to a potent mix of preservationists, developers and city politicians. It must strike a balance between protecting architecture and accepting economic realities, between a responsibility to history and a knowledge that the city must evolve.

Nobel Laureate Economist Paul Krugman on spending our way into economic health: "strong fiscal expansion would actually enhance the economy’s long-run prospects... The bottom line, then, is that people who think that fiscal expansion today is bad for future generations have got it exactly wrong. The best course of action, both for today’s workers and for their children, is to do whatever it takes to get this economy on the road to recovery."

The banking industry has taken pre-emptive measures to help borrowers. The best example is an initiative, announced this month, to help those who took out loans backed by Fannie Mae and Freddie Mac, the government-owned companies that buy conventional mortgages from a wide swath of lenders. The companies’ loans make up about 58 percent of single-family mortgages nationwide. Borrowers who are struggling with mortgage bills should call their servicer to discuss the Hope for Homeowners program.

The evidence of a recession has been widespread for months: slower production, stagnant wages and hundreds of thousands of lost jobs. But the nonpartisan National Bureau of Economic Research, charged with making the call for the history books, waited until now to make it official — and the announcement came on a day when the American stock market fell nearly 9 percent in a single session.

I've seen some anecdotal evidence that the luxury market has rebounded in November after a hiccup the month prior as reported in this WSJ article which says that "those still in the market for a fancy house can find some huge discounts. The late Brooke Astor’s 14-room duplex on New York’s Park Avenue is listed at $34 million, down from $46 million."

Robert Shiller, a well-known economist and professor at Yale University, said the ongoing financial crisis could last for years. He said blaming monetary policy for the crisis is simplistic and misleading, and called for three solutions to prevent a similar crisis in the future.

The strategy has become wearyingly familiar to preservationists. A property owner is notified by the landmarks commission that its building or the neighborhood is being considered for landmark status. The owner then rushes to obtain a demolition or stripping permit from the city’s Department of Buildings so that notable qualities can be removed, rendering the structure unworthy of landmark protection.

Federal authorities in Washington informed law enforcement officials in New York this week of a possible Al Qaeda plot to bomb transportation systems in and around New York City. The NY Police Department deployed extra officers after learning of “aspirational” plans for transit attacks over the holidays.

How will the U.S. pay for it all? Answer: by borrowing -- raising worries about how the country's ballooning annual budget deficits and aggregating debt will affect the economy and financial markets. Some guidelines, such as interest rates and the ratio of debt and deficits to gross domestic product, suggest the new debt will be digested easily. But some experts think those guidelines are misleading, warning that obligations are piling up like tinder on a forest floor.

The government announced it will spend $600 billion to take on the obligations of Fannie Mae, Freddie Mac and Ginnie Mae in order to reduce borrowing costs for the government-sponsored enterprises (GSEs). "Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally," the press release announcing the program said.

The gargantuan efforts — one to finance loans for consumers, and a bigger one to push down home mortgage rates — were the latest but probably not the last of the federal government’s initiatives to absorb the shocks that began with losses on subprime mortgages and have spread to every corner of the economy.

Paul Volcker, who helped tame runaway inflation in the 1980s during two terms as chairman of the Federal Reserve, has agreed to lead a new White House economic advisory committee.

The federal government had charged that the Realtor group approved policies governing the online sharing and display of property listings information that were illegally restrictive, while the Realtor group countered that the policies did not violate federal antitrust law. Under the settlement agreement, NAR must adopt a "Modified Virtual Office Web site (VOW) Policy" that allows member brokers who participate in multiple listing services to operate Web sites that carry property information from other brokers and does not allow other brokers to "opt out" from sharing property listings information with those VOW sites.

A problem was that most consumers never knew going into a transaction what would happen between posting in the multiple listing service and getting the closing check or the keys to their new home. Consumers generally think that brokers do far less than we really do for our fees.

His reported selections for two of the major positions in his cabinet — Senator Hillary Rodham Clinton as secretary of state and Timothy F. Geithner as secretary of the Treasury — suggest that Mr. Obama is planning to govern from the center-right of his party, surrounding himself with pragmatists rather than ideologues.

Economists at Freddie Mac are more pessimistic about the economy than they were a month ago, and no longer believe mortgage originations will rebound in 2009.

In another sign that the struggling economy continues to slow, consumer prices tumbled by a record amount in October, carried lower by skidding energy and transportation prices, raising the specter of deflation.

Any elimination of the popular rebates requires City Council approval, budget director Mark Page acknowledged. And council members, who have been flooded with calls from angry residents looking for their checks, declared the mayor’s idea to cut them “dead on arrival.”

Realogy Corp., owner of the Century 21 and Coldwell Banker brands, is at risk of violating the terms of its bank loans and is offering to exchange about $1.1 billion of bonds at a discount for new debt.

From the life imitates art archive: Okay, so it hasn't really happened yet, but there are news reports swirling around about Hillary Clinton and John McCain possibly, maybe, being considered for Cabinet positions in the Obama Administration. Well, The Onion called it back in May in this story dubbed the "2008 Nightmare Ticket" during the primaries. Brilliant!

A year before the next mayoral election, Michael R. Bloomberg appears to have settled on his campaign message: higher property taxes, smaller school budgets, shuttered dental clinics, more parking fees and a new surcharge on plastic shopping bags.

Treasury Secretary Henry M. Paulson Jr. announced a major shift in the thrust of the $700 billion financial-rescue program on Wednesday, at the same time joining several agencies in prodding banks to speed up the thaw in the country’s credit system. He is backing away from buying troubled mortgage assets in favor of a second round of capital injections into financial institutions.

The company’s results suggested that home prices are far from a bottom and that the government would probably have to pump tens of billions of dollars into Fannie Mae and its sister company Freddie Mac.