NYC Bloodbath Continues: "Manhattan Apartment Rents Fall as Unemployment Rises" (Bloomberg)

No, way, rents haven't fallen. And Manhattan prices haven't declined at all.

Perfitz said so.

My case for optimism: in the past decade, NYC suffered one of the greatest stock market implosions (dot.com bust), the largest terrorist attack on the continental US, and a second, more severe correction to the markets which decimated one of its key industrys and severely damaged almost every other sector. Yet, people still want to live here. The fact that ANYONE wants to buy a home here, much less 500+ in the last 30 days says something to me.

I subscribe to Noah's analysis - we will see a majority of the correction by Q4'09/Q1'10, and then a "muddled L". How far down we go by then is anyone's guess, but I think it will vary greatly by boro, neighborhood, down to the block and building - and there will be significant variation based on apartment size to reflect a changing demographic. I see some properties trading as little as 15% from peak by then, and some off by as much as 40%. Reduced purchasing power will cause any bottom to be prolonged and we probably won't re-visit the 2007/08 highs for another 5 years (2014).

I suppose that isn't particularly optimistic, but unless you purchased a severely overpriced condo in 2008 that you absolutely have to sell in 2009, you should be OK.

Just to quibble with one aspect of your analysis, OTNYC, when you talk about "the largest terrorist attack on the continental US," I think you have to remember that that prompted an enormous outpouring of support for the city itself. Fair or not, this crisis is physically associated with the city's Wall Street, and that alone will tarnish its image. There are a lot of people who love the city's cultural diversity that might be willing to stay through tough times, but they're not making six figures and they're not going to be contenders in the RE market unless it comes down substantially.

Also, the stock market bubble ending in 2000 did NOT lower overall Wall Street employment...as EVERYONE else but you knows by now super-low rates made teh mortgage side of the banks and buy side firms hum along quite nicely, and overall employment by wall street firms kept rising through and until 2007

So...THIS bubble bursting is different.

'Also, the stock market bubble ending in 2000 did NOT lower overall Wall Street employment'

that statement is 100% false - from 2000 peak to 2003 trough, employment on wall street dropped by over 20%. it picked up after that and its 2007 peak was higher than the 2000 peak, but to say that the 2000 bubble pop had no impact on employment on wall street is utterly incorrect.

actually, to clarify, total financial sector employment in NYC itself never exceeded the 2000 peak, but if you account for jobs moved to other parts of the metro area it did.
everyone seems to have awfully short memories of how big the tech bubble & burst was on wall street, and the impact it had on the city's finances. i that's because wall street was able to find new revenue sources and grow again.
of course 'this time is different' - greed is gone and wall street will never again be able to separate people from their money.....

pp5-7 in this link show Wall Street employment stats from before the dotcom downturn through last November (most recent available from the securities industry trade association). NYC-based jobs peaked in Dec 2000 and were down about 3% by the end of August. There was a big step down after 9/11, due both to the market downturn and to companies who lost space relocating to back-up facilities in NJ and elsewhere, and then a further slide, mirroring the poor business environment, to what looks like a trough in Oct 2003 right at 160,000 (-20% from peak). It looks as if the 2007 peak came up just short of the 2000 peak.
http://www.sifma.org/research/statistics/other/employment-NY-quarterly.pdf