Appraiser Jonathan Miller recently released his annual 10–Year Manhattan Market Report that shows NYC Median and Average property Prices, adjusted for inflation, are the lowest since 2004. That is in stark contrast to what everyone seems to think about NYC apartment prices, given the constant stories about Billionaires purchasing at One57, 15 Central Park West and 432 Park Avenue.
For the average customer, however, apartment prices in Manhattan are as low as they are going to get, taking inflation into account. Foreigners come to NYC and find that the prices in Manhattan seem a bargain compared to places like London, Hong Kong and Singapore.
That doesn’t mean that NYC apartment prices will stay low for long, however, as there has never before been such a scarcity of apartments like there is in today’s market. Given scarcity and lack of new development coming on the market anytime soon, prices are expected to rise in 2013. We have already seen a pre-cursor to this in the form of bidding wars, not seen since 2007 at the peak of the housing market.
Here's a video from the WSJ that discusses this topic.