It was bound to happen sooner or later.

The real estate bust of 2008 is finally having an impact on one of the last hold outs, New York City.

Manhattan, in particular, seemed all but immune to the current subprime mortgage mess mostly because foreign buyers were able to take advantage of the declining value of the U.S. dollar.

But, now, even that bubble has apparently burst.

The Real Estate Group in New York reports that rents in Manhattan decreased last month by more than 7 percent.

The last time rents actually went down in Manhattan, George Washington was president!

Part of the reason, no doubt, is that, even in New York, there is somewhat less demand for expensive condos and co-ops leaving many to the rental market. That translates into lower prices.

According to Multi-Housing News, there are some who believe the situation in New York will now worsen..a lot.

It quotes James Hughes , dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University as saying that housing “might be twice as bad as the period after the 1980s real estate bubble.

One bright spot here…according to Huges, those who held on to their real estate property throughout the last bust and subsequent upswing saw their houses, on average, double in value.

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Tags: manhattan, new york city, real estate, rental, rutgers university

There is a land where the normal physics of real estate does not hold sway; a place so special, those who reside there are seemingly inoculated from the everyday concerns of mere mortals.

The housing bubble may burst; the credit may crunch; the mortgage industry may go so far south that Bolivia would be akin to the North Pole. And yet, on this special island, those charmed through luck, perseverance or family fortune can go about their lives all but oblivious to the calamity of the outside world.

That island is, of course, Manhattan. (Come on now folks, you didn’t think I was talking about Cuba, did you?? Only Michael Moore would think that!)

In a bit of understatement worthy of the Pentagon reporting Iraqi war casualties, senior brokers say Manhattan is “holding its own,” says The Real Deal, which tracks such things.

In fact, says the Real Deal article, Manhattan is “proving its exceptional nature once again.”

Duhh. Well, yeah! What else would it do? Manhattan is , as the Sunday New York Times proclaimed in its Sunday magazine section, “where the haves live!” Everyone else presumably lives in Newark or places even further from Oz.

Take just one example: According to the Times, “in the area from 56th to 59th between Madison and Park, average household income increased almost 700 (that’s seven HUNDRED) percent between 1980 and 2000.” Think that might keep real estate prices high?

Even Harlem is “special.” According to Realty Times, “Harlem is still rife with investment opportunities,” and quotes one commercial real estate agent as saying that Harlem’s “profitability has not suffered significantly…”

It is not only possible, but likely, one could spy an 18 year old emerge from a gleaming 5 million dollar one bedroom condo in the former Meat Packing district—now the “in place” to live and play in Manhattan for the under 40 crowd–affording his new abode courtesy of either wealthy parents or foreign money or both. After all, there are not many 18 year olds who can afford 5 million dollar condos on their own dime.

For real estate developers, this is great. No shortage of cash and credit bloated customers in line for Manhattan properties. Of course, this does tend to drive up costs for those who actually live on Earth as opposed to floating above it. No matter,though. What matters is, Manhattan , at the moment, is like no other place in the United States–on this charmed isle, apples fall upward once detached from trees; water flows uphill to the surprise of no one and the expectation of everyone; and the mortgage/housing/credit “crisis” is nothing more than a burp for which a bit of Alka Seltzer will set all right.

As for Brooklyn—–don’t get me started.

Tags: harlem, harlem real estate, manhattan, manhattan real estate, new york city, New York Real Estate, nyc, real estate