But McCarthy says overriding everything else is what’s happening in Europe and how the sovereign debt crisis over there is going to be resolved. “It is just a slow growth economy not just in the US, but globally,” he says. “Just about every major nation has slowed, and in some cases, like Europe, some of those nations have dipped into recession. It is a global phenomenon and we are as much part of it as anyone else. The US economy is in slow growth mode until a lot of the uncertainty that faces us is cleared up. We have elections coming up and we have a fiscal cliff facing us, and who knows how that will be resolved, and we all hope it will be resolved, and that’s why I think the probability of a recession is 25% according to those analysts. It is largely because of the fiscal cliff, because if that doesn’t get resolved early in 2013, than the impact of the higher taxes and spending reductions would push the US economy over the edge, but the hope is that it would get resolved in some way, and that’s why the probability is low, but it is not insignificant.”

Peter Kozel, chief economist for Colliers International’s Tri-State Region, tells GlobeSt.com that due to high bifurcation in different neighborhoods, it is difficult to determine whether commercial real estate will take another blow in the marketplace. “It is not a simple yes or no; it is a little more complicated in the sense because we are seeing some slowdown in some parts of the city, but other parts are holding up quite well,” he says. “Any segments of the market that are associated with financial services, to even some degree legal services, have seen some slowdown in leasing activity and a little bit of weakness in rents. There are some parts of the market that are very tight in the high-tech sector and digital media continue to do quite well.”

In New York City’s financial services sector – among the biggest in the country – the city reported losses of 3,600 jobs in the financial services sector for the 12-month period ending in August 2012, according to the New York State Department of Labor. By year-end, state comptroller Thomas P. DiNapoli predicted that the losses could climb to 10,000. At the same time professional and business services are up (+35,000), as well as leisure and hospitality (+18,700), education and health services (+17,800), trade, transportation and utilities (+14,600) and information (+10,400).

But due to the Fed’s actions to buy up Treasuries and keep interest rates low, Kozel says risk can increase going forward. “I’m not surprised that S&P is saying this,” he adds. “There’s been a lot of talk about the possibility of a recession next year.”

There is, however, one bright spot. S&P says the housing market, which has been a drag on growth since 2005, may actually help the recovery. The ratings agency predicts that residential investment will contribute to GDP growth for the first time in seven years.

The reasoning, McCarthy says, is due to high affordability for single-family homes. “I would expect that we would start to see activity pick up,” he says. “And when that happens, we still have to work through a lot of delinquent mortgages before we really see housing begin to ramp up. The thing about housing is that when it does grow it adds a multiplier effect because when people buy a house, they buy appliances, they buy furniture, they buy carpeting, they use financial services, they hook up to utilities and do all kinds of things that have a multiplier effect through the economy. Getting housing going again and seeing housing recover would in fact diminish the possibility of recession. If housing starts to pick up, that will lead to stronger consumer spending in a lot of other areas. But getting through into next year and seeing what happens with the budget deficit is going to be a big issue. That to me is the main threat in terms of taxes and spending.”