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A negative housing report took all the wind out of the stock market today. The Dow dropped 136 points to close at 10,039. The Nasdaq and the S&P 500 each dropped about a half a percent.

That report from the National Association of Realtors found the lowest rate of existing home sales in more than a decade. Compared to a year ago, sales were off 25 percent. Analysts had expected a drop, but not one this steep.

Also today, a New York City construction industry group reports new building starts were down significantly in April, May and June. The total value of all new commercial, residential and infrastructure projects was $2.5 billion, off 43 percent from the same period last year.

But there is one bright bit of news in the real estate world today. Crain's reports the Empire State Building is close to signing the biggest new Manhattan lease of 2010. Hong Kong-based Li and Fung, an apparel company, is interested in 500,000 square feet in the iconic tower.

Home Sales Fall in July

Sales of existing homes plunged in July to the lowest level in 15 years, with sharp declines recorded in all regions of the country. In New York City, sales were down 25 percent from a year ago. Jonathan Miller, president of the appraisal firm Miller Samuel, talks about the latest housing report.

The stock market didn't react favorably to the housing news. What do you make of it?

It's quite curious actually, because I don't think this was a big secret. The tax credit that was installed to incentivize home owners to move their purchase plans -- earlier this year they had to sign a contract by the end of April -- essentially poached from this period of time that we're entering right now. As a result, you had artificially high sales in the first half of the year, and now you're seeing artificially low. The difference is that 27 percent month-over-month drop.

So do we need then another tax incentive plan, or is that the problem?  

I think that's the problem, because essentially what you've done is you've artificially incentivized the market, but once you remove the stimulus, the market doesn't have enough to go on its own, and that's because it's all about employment. And unemployment, while we've seen some modest improvements, it's still very high relative to a few years ago.

Let's talk about that. New York City has seen job growth, and an unemployment rate that's fallen seven months in a row. This, taken with the national figures out today -- how does it bode for the New York market?

I think in many respects, compared to other housing markets, we're doing better. But that's really a relative term. We're still exposed. And the primary reason we're exposed is the combination of high unemployment and also very tight credit -- that mortgage underwriting for banks is still extremely tight. It is very challenging to get a mortgage, even though, perhaps, there's more demand there. People just can't get financing, and that's not necessarily a bad thing. I think we need to go through the motions here and experience some of the pain to get through this.

MTA Details New MetroCard Options

Speaking of shocking numbers, the MTA outlined a complex scenario of fare hikes last month that, if approved, will raise the price of a monthly MetroCard to either $99 or $104. But this week, the MTA placed notices in newspapers with a different price tag: a $130 MetroCard. WNYC's Matthew Schuerman explains.

Matthew, where'd this $130 figure come from?

The $130 figure really should be seen in context as part of a two-tiered plan with a $99 figure. You're basically going to have a choice when you go to your MetroCard vending machine of either buying the $99 one, and that would be capped at 90 rides per month, or you can opt for the super-platinum deluxe-edition MetroCard -- $130, you can take the subway as much as you want, 100, 200, 300 times a month, and it will get you through that time.

What's the likelihood of a two-tiered system, with one monthly card that's capped and another that's truly unlimited?

The MTA says this is not an official proposal, although they did put it into their official public hearing notice, so that's what's sort of confusing about it. But basically what happened was they came up with another two-tiered proposal before, which was basically either a $99 MetroCard capped at 90 rides or keeping it unlimited -- as we know the monthly MetroCard today -- and sell it for $104. But it was either/or, you didn't have a choice when you went to the MetroCard vending machine, whereas now a lot of people are asking, including board members, well what if we had the $99 for less frequent users, how much would it cost to be a messenger, or some other job where you're really taking the subway a lot, how much would that cost? And that's where the $130 one comes in. So we'll see from the public hearings how intense support for the $130 one is.