Twice this month, the potential for a bankruptcy filing by the City of Harrisburg has been mentioned in national publications - Bloomberg.com at the beginning of the month and, last Thursday - The Wall Street Journal.
It is by no means clear that a bankruptcy filing is imminent, but similar talk in municipalities across the country recently has caused investors to rethink the safety of municipal bonds as an investment. See the WSJ article for further discussion of this point.
The effect on the local real estate market is uncertain, but my own opinion is that a bankruptcy filing would place less downward pressure on real estate values than the tax increase recommendations made public last month.
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