Grubb's report notes that as in other markets across the US, New York residential condominium projects coming online in the next couple of years may have to be converted to rentals "as prospective purchases are reluctant to buy in a down market and financing is difficult for certain buyers to come by. Recent appreciation in the value of the dollar discourages foreign buyers as well, which could help rental apartment building prices to outperform other types of real estate in the New York market."

Marcus & Millichap expects the local buyer pool for multifamily properties to change "significantly" this year, even as local transaction velocity remains modest. "Experienced New York property owners who have waited on the sidelines for the froth in the investment market to dissipate are poised to re-enter the market. Sovereign wealth and opportunistic investment funds are also expected to increase their presence this year as economic and financing issues provide easier entry for buyers with cash."

Going forward, the Marcus & Millichap forecast says that investment speculation will gravitate toward location and strong historical performance, "although the trickle of distressed property sales that has begun in tertiary locations like Brownsville/East New York, Bedford-Stuyvesant, South Bronx and East Harlem will likely offer buying opportunities."

Fourth-quarter reports from residential brokerage firms have yielded mixed signals in terms of pricing and sales velocity. A Prudential Douglas Elliman/Miller Samuel report observes a 9.4% year-over-decline in sales overall and a 24.8% year-over-year drop in re-sales. The report notes that the average sales price on a Manhattan apartment was up 3.1% year over year to $1,485,102, but adds, "this gain was caused by an increase in closings of new developments properties, which generally are more expensive."

Halstead Property's Q4 market report shows a 3% year-over-year increase in co-operative prices but an 8% decline from Q3. The report says that a 7% decline in the average condominium price from Q4 2007 was due primarily to fewer closings at the ultra-high-end 15 Central Park West and the Plaza. In Q4 '08, the average time on the market for apartments sold was 100 days, 16 days more than Q4 '07. Sellers received nearly 95% of their asking price, as compared to 98% a year earlier.

"While we show a decline of 2% from the third to fourth quarter of this year, our real estate market is still holding up relatively well when compared to some parts of the nation," says Halstead president Diane Ramirez in a release. "We are clearly in a buyer's market and there are a number of great deals out there. Combined with low interest rates, this is a really good market for someone looking to buy real estate."

At Brown Harris Stevens, whose Q4 report offers similar figures, president Hall Willkie notes in a release that Q4 '08 figures "largely reflect closings of sales that went to contract months earlier, and are therefore indicative of the market at that time. Despite the current economic environment, we should remember that New York City is unique. As we have learned, we are certainly not immune to economic woes, but the fundamentals of our market are stronger than most."

On the rental side, brokerage firm the Real Estate Group of New York notes declines in asking rents across all classes of apartments except two-bedroom doorman apartments. The declines range from 2.04% for non-doorman studios to 9.2% for doorman studios.