Experts caution this runaway train may hit the buffers.

The real estate market has gone to insane heights recently, but every bubble has to burst, said some of AREW's Panel of Powerful Executives this week.

Held at Club 101 at 101 Park Ave., the panel of four top executives was moderated by Eileen Spinola, senior vice president of the Real Estate Board of New York, who asked the experts their opinions on several issues affecting the market.

Interest rates remain low and banks are loaning money, driving both the residential and commercial market, said Darcy Stacom, executive vice president/partner Investment Properties Institutional Group/CB Richard Ellis.

But Stacom sees a market turn around. "There's too much equity. There's too much debt," she said. "I've been in this business over 25 years and there is no such thing as a cycle that doesn't end. If you put enough straws on a camel's back, it will break."

Stacom cited Vornado's recent $113 million acquisition of the retail condominium, the former Westbury Hotel, that occupies an entire Madison Avenue blockfront between 69th and 70th Streets, as a headline-making investment. "Vornado is always going to be on the front page," Stacom said. "I think it's just the sheer dollar number transfers have gotten large enough to be newsworthy. So when Vornado buys a retail strip that is actually very small square footage wise, but it trades at $113 million people write about it. Retail has seen a tremendous amount of investment. It will always be your best investment."

Virginia Pittarelli, CEO Madison HGCD, agrees, and added that the lack of retail product on the market is holding prices steady.

In the past few years, the influx of the bank retail has caused bidding wars, Pittarelli said.

"Banks have helped the huge rental market. Most banks want corner locations," she said. "Specialty retailers can't compete with what the banks can pay. What the banks have done after 9/11 is keep the rental rates high, with the exception of Soho. Spaces may have stayed on the market a little longer, but the rental rates remained the same."

She also said that national and international retail companies that may have been hesitant to open shop in Manhattan are now seeing the value of being here.

"People always came into the Manhattan market with a little trepidation," said Pittrarelli. "They now have learned to understand it and realize there is a reward in having a presence in Manhattan and finding the right opening. The biggest problem is space."

Certain parts of the 5th Avenue corridor have become more popular as of late. "The move south on 5th Avenue corridor 42nd and 48th street is hot now," she said. "It's simply changing the completion of that corridor."

With the residential market breaking records, Jacky Teplitzky, executive vice president of Prudential Douglas Elliman, said the market changes on a daily basis. "I don't call this a sellers market. I call this an insanity market," she said. "It's moving ahead of us so fast that brokers don't know how to price it."

Even after the September 11 attacks, the residential market rebounded quickly. "On Jan. 7. 2002 the phones were ringing off the wall and it didn't bring down residential prices," said Teplitzky, who gave an example of her own two-bedroom, two-bath apartment in the East Village that has increased in value from it's 1993 listing price of $185,000 to $1 million in today's market.

Prices are staying high, she said. "The wait and see attitude never proved itself right in New York. If you have to buy, buy," she said.

"Either you bid asking or you bid above asking, because there is nothing less. There are no negotiations and there are no comps."

In addition, Spinola asked the panelists whether the downtown area should take precedence over the city's plans for the West Side of Manhattan.

Michelle Adams, executive director of Association of a Better New York, felt downtown should be continue its move forward and should not be hindered by the West Side development.