It's official: Manhattan market moves into neutral gear.

Fewer apartments in Manhattan and Brooklyn were absorbed in September than in the previous 12 months, according to third quarter residential market data, a slowdown in sales that has caused the city's stock of available properties to swell and prices to falter.

Data released by the residential brokerage Halstead Property shows that the average price for an apartment in Manhattan has reacted, falling by 4% in the last year to just under $1.1 million. Unsurprisingly, apartments are also sitting on the market longer, 92 days in the third quarter versus the 68 days they were averaging a year ago.

In a statement, Halstead's president Diane Ramirez attributed at least some of the decline in pricing to a pickup in sales for less expensive apartment types, namely studios and one bedrooms, whose values have actually grown in the past year due to the activity.

"For co-ops, the average price rose 6% for a one-bedroom and 2% for a studio, while condos increased 5% for one-bedrooms and 4% for studios," Ramirez said in the statement.

But residential experts indicate that the slight slip in pricing and certainly the longer timeframe that apartments have taken to sell seem indicative that Manhattan too has been hit by what the Federal Reserve identified in a report last week as a national trend: the country's residential market, after years of rampant appreciation, has finally begun to cool.

Like New York City, many of the nation's housing markets, according to Fed data, have experienced a swell in inventory, decline in pricing, and have seen property linger on the market for longer periods than in previous quarters.

"Nearly all Districts reported that housing market conditions continued to soften, though several noted that activity increased in some markets," the Fed stated in last week's beige book, a report on economic activity that is issued eight times annually. "Most Districts reported higher home inventories, and several said that homebuilders and sellers continued to offer incentives to attract buyers."

Despite the slowdown, the cataclysmic residential market meltdown that some observers said were the inevitable consequence of a market that had risen to unprecedented pricing levels in recent years seems unlikely to materialize in the near term, according to the Fed's data. Consumer spending, helped by falling gasoline prices, has not fallen enough to damage the economy--what was thought to be the grave consequence of a pricing correction in the residential market. Such spending, which drives two thirds of country's economic activity, is tied to real estate pricing because much of the consumers' cash comes from what they are able to leverage against the value of their homes.