October 1 - conforming loan chage - kryptonite?

Doubtful. I'm looking to buy in that range, and I don't expect it to keep me from being able to purchase. I've already done a lot of research, and contacted a number of banks to learn more. More banks are now (once again) offering jumbo loans, so they will be a tad easier to get than they were in the recent past. Just as importantly, the spreads between conforming loans and the jumbo loans is not that large, so the impact on monthly payments will be minimal. I think the biggest impact will be on the extra down payment required, but given the size of the numbers we're talking about, I think many buyers that can afford to buy apartments in this price range can afford the extra downpayment. It will clearly have more of an impact on apartments at the higher end of your range than in the 800K-1M range, but I don't think it will be a widespread reason why someone forgoes a purchase. Not me, anyway.

>>>Is this the kryptonite of Manhattan RE values?

Yes-- the recent bull market in Manhattan RE has been partly fulled by ease if financing and affortablity products(IO mortgage, Option arm etc). As these product become less and less available and underwriting becomes more strict, financing becomes more and more difficult. Manhattan RE will take a hit. One should also note that FNmae and Freddie MAC(Government sponsered entities) are also enforcing their guidlines for Condos and Coops..

So yes this will just exacerbate the already decling RE market in Manhattan especially in the $1.5mm - $800k range.

Just as importantly, the spreads between conforming loans and the jumbo loans is not that large, so the impact on monthly payments will be minimal. I think the biggest impact will be on the extra down payment required, but given the size of the numbers we're talking about, I think many buyers that can afford to buy apartments in this price range can afford the extra downpayment.

Good Luck getting a jumbo loan in the market- "they will be tad easier to get than they were in the recent past." they were next to impossible to get in the recent past. If you were able to get a jumbo loan - appraisals were strict and substantitally lower. So listings at inflated will not work. Additionally if your building(condo or coop) dont have very good financials ie do not meet the guidlines set by fn/fd you will not be able to get financing. FN/FRDmac have just starting enforcing these in the past few months. They have been lax on enforcing them in the past-- ie during the bubble. IF not there is a good chance your maintenance will be going up.

Red kryptonite, maybe.