"There's a lot of stability in the Bronx market," says Krasnow. Investors "didn't get hurt" there over the past couple of years, which has helped keep up demand.

Across the board, the decline in dollar volume outpaces the drop-off in the number of transactions. "Financing is still coming from the mid-sized and regional banks; it's not at the high-end institutional level yet," explains Krasnow. "That's why our reports show that volume is off more on the dollar side than on the transactional side. There are more smaller and mid-sized deals being done, because that's where financing mechanisms are still available."

Until institutional-level financing comes back in to normalize the market, deals in the nine- or 10-figure range will be far and few between, at least until sometime next year, says Krasnow. He notes that one bigger transaction we may see in the next several months is S.L. Green Realty Corp.'s 485 Lexington Ave., for which the REIT is asking around $500 million. Absent a deal of that size, though, "You'd need 10 transactions of $50 million to equal the dollar volume."

Along with high unemployment weakening fundamentals, loan defaults will contribute to declining prices--and, eventually, more inventory coming to market. "A lot of people thought that we'd be seeing more distressed inventory, but now they're coming to the realization that it probably won't be the flood or tsunami that they were expecting," Krasnow says. Therefore, as investors see assets in the property types or locations they're looking for, "they're not hesitating to get back into the game a little bit."