For most of last year, the co-op and condo market here moved ever higher month after month, but in early 2001 it has shown signs of weakness. Although prices have not slipped markedly, the volume of sales has dipped, according to the Beige Book, because there is a standoff: prospective buyers are not motivated to strike a deal, and sellers don't want to lower their asking price.

The report also notes that the arrival of a significant number of rental units on the market has led some owners to offer incentives to tenants such as a month of free rent. At the high end of the market, however, business is brisk because those who would otherwise buy an apartment have opted to rent for the present.

Owners of commercial real estate, on the other hand, are blessed with more positive circumstances: both the space being surrendered by dot-coms and the new space being delivered to market is being snapped up by financial and telecom firms, according to the report. Although vacancy rates have inched up, they remain very low, while rents have jumped approximately 20% over the last year.