Most Expensive U.S. Residence: Fact or Fantasy?

Foreign Buyers

Gross says that the market for classic co-op buildings is so strong because they have inherent values that safeguard them from real estate slumps. "These co-ops have certain ownership structures that protect you against credit crunches -- their boards don't allow people with shaky finances by not letting them borrow 90 percent of the value of the apartment; they are architectural treasures and the location is priceless."

Another major reason is the continuing appeal of living in the city. "A lot of very rich people who've made money in the last five years want to live at the center of the world, and the dollar is weak, so people with currencies have money to buy these units in cash," says Steven Gaines, the author of "The Sky's the Limit, Passion and Property in Manhattan."

Yet that enthusiasm may be starting to ebb as the credit crunch continues to damage the economy, say a few of the city's high-end real estate brokers. Dolly Lenz, the city's premiere luxury broker, who was nicknamed "Jaws" by former Tyco CEO Dennis Kozlowski, notes that many of the recent high-end deals were actually made earlier in the summer before the onset of the subprime mortgage crisis.

"At the high end, $20 million and above, nothing's selling," says Lenz. "Nothing's been selling since August. That's when the whole mentality went from 'Why not?' to 'Why?' You ask yourself, do you really need the room for that extra $23 million?"

The market for under-$6 million apartments is stronger than ever, with buyers flocking to open houses on worries that they won't be able to get financing as banks tighten up on credit, Lenz says.

"People at the very high end who are never cautious are cautious, and people who were always cautious are jumping in because they may never get another opportunity," she added.

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