The other day a friend and client called me to get my take on what I thought was happening in the Manhattan Market.  He asked me “are you feeling a squeeze?” After we talked , and I shared with him some recent transaction busts, I started thinking about what really was going on.

It was very volatile for me last week, the market changes cost me a hefty amount of commissions on three deals. With a new seller changing their mind, a bank pulling out last minute and a buyer thinking he could get a better deal going out directly deeply impacted my own financial situation.  The attack on my wallet, got me thinking… so I did a little research and found this “softening” feel is now hitting NYC. Seller’s are sticking to their prices, Buyers are hesitant and brokers/agents are getting it from both sides. It’s like a broken traffic light, Go Stop, Slow down, Go, Stop, Stop.

In Barron’s bad news of Signs of Softness Appear, the Manhattan market has held its own, now we are feeling the rest of the country’s woes.

Signs of cracks in Manhattan’s property market could mean the rest of the country is on the road to recovery, since New York tends to feel the effects of a slowing economy later than the nation does.

Leslie P. Norton

The article states: “In the next few weeks, real-estate brokers will release a report on the median price paid for a Manhattan apartment during the second quarter. Those who’ve been waiting for a decline — like the one most big U.S. cities are suffering — will be sadly disappointed. Driven by extraordinary gains in luxury co-op and condo prices, this quarter is likely to be even better than the bang-up first quarter, when the median sales price was $945,276, 13.2% above the year-earlier level and 11.2% above the 2007 fourth quarter’s figure.

But bargain hunters — or at least those who can’t afford multimillion-dollar digs — shouldn’t despair. More rational prices already have begun to take hold in lower price ranges. And because New York real estate tends to lag behind other cities’, it’s possible that any coming price decline in Gotham will mark the start of the last phase of the latest national real-estate debacle.

A rash of price reductions now skitters across the columns of the New York Times real-estate classifieds, testament to diminished expectations. “We have dramatically reduced the price of this 1BR in prime West Village,” blares an e-mail from a broker for a small, light-filled apartment at 295 West 11th St., not far from the chic Meatpacking District.

That’s not the story on the extreme high end, which is supporting the overall Manhattan marketplace. The New York City borough’s luxury apartments start at about $8 million and account for roughly 5% of the market. This segment is disgustingly healthy, particularly in trophy buildings like the refurbished Plaza Hotel and Tony 15 Central Park West. (At the latter, a venture capitalist recently listed his four-bedroom, 6½-bath apartment for $90 million — $60 million more than he paid for it the previous month.)”

What concerned me in this article was my own experience with “middle priced properties” now seems city/country wide.

The very top of the market may not feel a thing. The first quarter saw a 318% increase in the number of closings for apartments costing more than $10 million, buoyed by two $40 million-plus sales at red-hot 15 Central Park West. And despite the dire headlines, Wall Street’s bonus pool fell just 2% this year over last, hardly a sign of imminent crisis.

Manhattan has a substantial list of other measures of support. Its housing stock is 70% co-op, whose notoriously scary management boards usually insist on decent credit quality and impose draconian rules about subletting. And the city remains a world capital, drawing many wealthy foreigners eager to take advantage of the cheap dollar.

If Manhattan real-estate prices do fall, the rest of the country may have reason to applaud. “We typically go into a slowing economy later than the nation does,” economist Heym says. So any weakness in Manhattan could mean the rest of the country is on the road to recovery.

In Manhattan, I feel if the property is under $500K or over $3 Million it seems that it is not an issue of selling. The property is negotiated, then closing the deal is successful and timely.  However that “Mid Range” is such a sticky gray area where the people who need borrowed money to purchase are confused and concerned.  It’s true that consumer confidence is down, stocks unsteady and the unemployment rate rising, all key factors in this business.  We went from a BOOM to a bust quickly, and things definitely have changed pace, not necessarily dwindled, but timing and thinking are more important now.

I think there will be a change in real estate across the board, not only on the market but the profession as well.  The strong will survive, if there is any a time to chalk up and get ready for the competition its now! And hopefully Mr. Whipple won’t squeeze us anymore!