In Manhattan, a million bucks will scarcely cover a median-price home, after you've paid closing costs, taxes and mortgage insurance. With nearly 1.6 million people living on a 20-square-mile island, the shortage of land tends to magnify the forces of supply and demand. During the real estate boom, developers broke ground on dozens of skyscraping condo buildings. Because of high construction and land costs, it's hard for builders to lower prices once demand cools.

At the end of the second quarter, there was an 11.9-month supply of condos and co-ops for sale, up from a 6.6-month supply a year ago. About 60% of that increase was from the construction of new condos, says Jonathan Miller, CEO of Miller Samuel, an appraisal firm in Manhattan.

"There are a lot of deals right now in the very high end," he says. "The remainder of the market is quiet. Volume is dropping. We are seeing sellers be a little bit more realistic in pricing."

At current prices, it makes more sense for a lot of renters to remain tenants. Some would-be buyers are also hesitating because of speculation that the Federal Reserve will cut interest rates next year, which could pull mortgage rates down.

As potential buyers try to wait it out, they're driving up rents. Miller says rents have risen 10% to 20% in the past year.

The most expensive

Martin Zweig, a leading money manager, is selling this penthouse on the top three floors of The Pierre hotel at the southeast corner of Central Park. He bought the property in 1999 for $21.5 million, then a record for a Manhattan apartment, from Australian publishing heiress Lady Mary Fairfax. If Zweig gets his asking price, it would set another record.

Price: $70 million

Bedrooms: 5

Bathrooms: 7 full baths, 3 half-baths

Size: 11,000 square feet

Features: This space was the original ballroom of The Pierre. The penthouse has five fireplaces, oak flooring, library, separate guest suites, terraces, views.

Median-price home

Loft-style co-op has the original tin ceilings.

Price: number

Bedrooms: 2

Bathrooms: 2

Size: NA (Co-ops aren't allowed to advertise the space).

Features: Open kitchen, washer/dryer (in Manhattan, this is a plus), hardwood floors.

Note: Because of the high price of land, most residences in Manhattan are either condominiums or cooperatives.

A condo is real property. The buyer owns the space in the apartment and a percentage of all the common areas.

A co-op is not technically real estate. Buyers own shares in a private corporation; they have a proprietary lease that allows them to use a specific unit in the building. The buyer must be approved by the co-op board.

Next week: Bismarck, N.D.