“We’re just waiting for the other shoe to drop.”

From the NY Post:

PAINFUL REALTY REALITY IN $5M+ NYC MARKET

Plunging stocks on Wall Street could mean panic selling on Park Avenue.

While most of the nation is already in the midst of a residential real estate slump, industry watchers say New York City – which posted record sales and prices in the last quarter – is about to experience a reality check.

“It’s getting very scary,” said one generally optimistic high-end broker. “We’re just waiting for the other shoe to drop.”

For the first time in several years, the top 10 percent of the residential real estate market, generally $5 million and above, is bracing for a big hit.

“It’s unusual that it’s affecting confidence in the very high end of the market,” said Dolly Lenz, vice chairwoman of Prudential Douglas Elliman, who has seen less enthusiasm by potential buyers in just the past few weeks.

But Lenz notes she’s still seeing healthy activity for homes less than $5 million.

Fueling the scare is the very real possibility that the city’s top financial institutions won’t be doling out hundreds of millions in bonus dollars to its executives.

“We’ve been very fortunate for the past couple of years,” Greg Heym, chief analyst of Brown Harris Stevens and Halstead Property, said of the bonus money sunk into properties.

“The recent volatility of the mortgage markets on Wall Street have the potential to impact the housing market here in New York in several ways,” said real estate appraiser Jonathan Miller. “Bonus income may be impacted as profits in the financial-services market begin to recede.”

Miller also added that tighter credit and the elimination of higher-risk mortgage products could have an impact on the flow of sales by reducing the number of buyers who qualify for financing.

“The reduction of mortgage players in the market could help drive up mortgage rates, which also reduces affordability,” he said.