First time post from a long time reader and active student of the Manhatten RE market for over two decades. I propose my assessment of the Manhattan RE at the macro level.

1. Rental market bottoms during Q3 '09 as turnover hits a peak and stable price points are reached. I expect a further 10% general correction as condo rentals continue to reprice rental buildings, with stronger corrections of 20% coming in the 'emerging markets' of FiDi/midtown west/harlem. I believe prices will remain low for a few years, however, anticipate a stronger base than we will see compared to the sales side.

2. Sales market will continues to remain dry with light activity ramping up in historically successful areas. I am concerned that pricing pressure for a majority of inventory will continue downwards through the rest of 2009/2010 and into 2011 with further declines of 25% on top of the 8%-15% I am currently seeing in a general sense.

3. As a typical contrarian, my instincts want to find a positive in the market to believe we are closing in on a bottom. Despite this, there is not a single indicator that exists which could even point to an imminent turnaround, and while the resiliency of Manhattan is hard to dispute, the reality of the wider economy prevails over time. Unemployment and taxes are on the rise, which makes a currently unaffordable market even more unaffordable.

4. If there is a long term positive, there is a growing pool of money on the sidelines. Regardless of this increasing trend, rent vs. buy calculations in Manhattan certainly will favor the renter as smart money will not take out a jumbo mortgage unless they have a sense of security in their ability to meet the obligations. The uncertainty that exists economically and in the job market will create the same irrational exuberance downwards that it created on the uptick. This is why speculation is so difficult as nobody can measure emotional decision making.

5. Crime and terrorism is a wild card and a potential 800lb gorilla in the room. History indicates that recession and economic downturns are met with increased crime and vandalism (not related to terrorism). City budgets will require a reduced police force which typically has a direct correlation with increasing crime rates. So many young families have urbanized in Manhattan and would be the first to abandon if they felt that safety was a concern. Anyone who ignores crime as a factor as significant as unemployment has not been around for a very long time. Anyone who doesn't know what terrorism can do to Manhattan RE has been around for even less time.

For the sake of transparency, I have owned in Manhattan since 1992 and expect to stay put until I die. I have bought and sold 3 times over the last 15+ years, starting with a 1br and purchasing a 3br on the UWS most recently in 2005. I expect to stay in my apartment until I die, at which point, I expect my wife and kids to keep the apartment as well. If your time horizon is like mine, opportunities will be about over the next couple years, but I don't believe there is any reason to rush or believe any broker that convincingly lays out a compelling reason to buy now. The Manhattan RE market must correct itself in order to be successful in the future, and I hope it does so in a way that doesn't take too many innocent people down with it.

All the best to all.