Manhattan's co-op and condominium market has softened of late, writes the Fed, with prices "edging down" and sales "falling sharply." Open houses bring a good turnout, but buyers and sellers have difficulty reaching agreement on a price. The result: apartments are on the market longer and sales are down.

Availability rates in the office sector are up modestly, while asking prices are up 20% above last year. The sublet market is reported to have a good deal of square footage on the market, however.

On Long Island, on the other hand, vacancy rates are stable and rents have risen 7% from a year ago, thanks to expansions by financial and legal services companies and high-technology firms.