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Could Mideast turmoil affect LI housing market?

In this photo taken during a visit organized

In this photo taken during a visit organized by Bahrain's Interior Ministry, Bahrain police watch vehicles passing through a checkpoint in the capital of Manama, Bahrain Monday, March 28, 2011. (AP Photo/Hasan Jamali) Photo Credit: AP

The continued turmoil in the Middle East could lead to significant upticks in the U.S. real estate market for both prices and interest rates, says one New York real estate attorney.

"Any time you have serious instability in places such as the Middle East, or places where our oil comes from, there is a political and economic impact," says Edward Mermelstein, a partner at the international real estate law firm of Rheem Bell & Mermelstein Llp. "Usually what happens is that high net worth individuals from countries such as Bahrain and Saudi Arabia want to move their funds and shift their assets to a place they feel is safe, like Switzerland, London and New York."

Mermelstein, whose family has either owned or rented in the Hamptons for almost nine years, says although Manhattan will bear the brunt of the current unrest, Long Island will also be affected.

"Long Island has always, to some degree, reflected what’s happening in the Manhattan market, and the impact of what happens in Manhattan is felt on Long Island. I see the Middle East turmoil impacting Manhattan pricing, and I see the spillover heading toward Long Island, especially to the parts that are considered just as prestigious as Manhattan."

Mermelstein advises Long Islanders who might be ready to refinance to consider doing so now. "I am a big advocate for the fact that our market is turning around, and Long Island is a part of that," he says. "If anyone is looking to refinance and solidify a low interest rate, to protect themselves against inflation, this is a good time to do that, because it's not just real estate prices that will increase. It's also interest rates."

Photo: Bahrain police work a traffic stop after unrest in the capital of Manama. (March 28, 2011)

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