Who's going to make a profit on this?

Let me add, I think this question will be more interesting if it doesn't turn into an argument about whether or not foreigners will continue to buy here. In fact, in order to steer the conversation away from that, I will start a 2nd thread specifically on continued foreign investment in NYC. Here, let's stick to professions which require one live in or near the city.

Irish carpenters? oh, sorry, wrong thread.

For starters, the city & state have the tall order of attracting different types of businesses into the playing field and significantly diversify from the current reliance on the fortunes of the financial sector/related industries. To achieve this, politicians will need to reduce the cost of doing business which is high relative to competing states.

If they are successful in the above, a new pool of buyers will certainly emerge.

NYU and Columbia profs and administrators?

People who sold in time, already made a profit on this. No-one else is profiting for now. Prices can very easily stagnate at a nominal growth rate for a while after dipping in the near future.

Anyone who has lived within their means, has cash and no debt will be able to take advantage of this type of situation and I suspect it will apply to a lot more than RE in the months ahead.

Divorce Attorneys ( i have a few acquaintances who say that business has been ticking up, no seriously not snark) Private practice physicians, psychologists, well respected authors and journalists, and a whole host of white collar professionals. Basically the same people that "got priced" out of Manhattan because of the up tick in ibanker compensation.

I think the majority of the people that are/were priced out at the peak are still priced out with a 25% correction, especially if the banks continue to require 20-30% down. Your typical couple with 1-2 kids making $300K total comp (say a doctor married to a journalist, or something like that), will be hard pressed to buy that nice "prime Manhattan" 1500SF apartment for $2MM, even if it's down 25% to $1.5MM.

True, but your assuming that the couple would want to live in prime Manhattan (i assume that is the really nice parts of UWS/Park Ave/trendy downtown loft-ness. What about yorkville and Manhattan valley (or whatever place it is in the low 100's on the West side) Sure they are not Soho, but I think places like Soho will never really come down in price. This is opposed to some UWS places that are asking 1.5M for a 2/2, so 1.1M with a 25% haircut. I think that is less than 4x their yearly income, so they might be able to swing it.