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According to the latest quarterly report from Halstead Property, the first quarter of 2008 saw property values continue their outlandish surge on the isle of Manhattan. The report touts "new records" in median sale prices and average apartment sale prices.

Yes, $1.69 million is the new average sale price of an apartment, but remember, that's "average" and that number was pushed up artificially by two high-end properties: 15 Central Park West and the Plaza.

Without those two, the average sale price would be a mere $1.4 million. Ah well. What this says, though, is that there is far more activity on the high end of the market, because the median sale price is $855,000 (which is still up 13 percent from last year).

In all my talking to NYC real estate agents (who I admit are my favorite talkers), I hear that the high end is benefiting from the foreign buyer whose cash is taking on a whole new kind of value these days. But what about the troubles on Wall Street? Well, they're coming.

We all know that no real estate broker in his/her right mind likes to talk about troubles on the horizon. But several have told me that while prices are still high, time on the market is growing. I do know of a couple of apartments that have been languishing a bit while the agents persuade the sellers to lower the prices. Unfortunately Manhattan sellers tend to be more stubborn than most, and why wouldn't they be, given what's been going on around them lately.

I think the real story is from the mortgage brokers. I spoke to one yesterday who deals in luxury Manhattan and Hamptons properties. She told me that the jumbo loan market in the area is really tightening, in fact just in the last few weeks, thanks to the Bear Stearns "issue."

Remember, there's really no subprime market in Manhattan, given that it's harder to get past a co-op board than any lender's standards (even now). Even with the raise in the conforming loan limit to $729,000, most Manhattanites need a jumbo. This broker tells me prices are going up on jumbos and more and more folks are having trouble getting the loan.

So is Manhattan impenetrable? Right now, I have to say, with the greatest of confidence: maybe. I still think the market is going to be supported by foreign dollars, and the simple issue of lack of supply and continued high demand makes a true crash next to impossible. But there is a bit of concern out there, as I'm hearing, words like "softening" and "slowing a bit."

I will always believe in Manhattan, because I grew up there, and I know what makes it tick, but even I think prices there have gotten out of control and could use, shall we say, a time out.

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