Rising bubble concerns in residential market.

Regardless of what shade rose-colored glasses you're looking through, the balloon has collapsed, leaving two or three hot air bumps. What is of deep concern are the aftereffects of the deflated balloon, i.e. the disappearance of low to moderate rentals, mixed-use, manufacturing, and warehousing as well as the threat of potential bankruptcies at all levels.

Two major questions arise. What are the responsibilities of the real estate industry and where does the phrase "buyers, builders beware" fit in?

Responsibility? Office spaces in midtown Manhattan and downtown Brooklyn are in demand. Midtown Manhattan trends are an invalid barometer for the rest of the city and Nassau County, which functions as a "sixth borough." Development of the rental, mixed-use, and commercial markets is weak in the outer boroughs and Nassau County are struggling to survive. Other than isolated projects that have been planned for years and/ or subsidized, sale of manufacturing or warehousing commercial property or even leasing is weak. Search the streets and read the ads. New building or conversion/renovation, including those in the margins of slums, are all aimed at the luxury market.

I don't know of any new construction meeting the residential rental needs of low- or moderate-income people. Focusing on luxury alone is aiming at a narrow target and ignores the fact that there's less risk in moderately priced residential development.

Beware? There is a high potential of either bankruptcy or escaping with heavy loss of money from myopic real estate investment. Considering the high costs of construction, insurance, and taxes, how can anyone produce housing at marketable prices now or in the near future?

If somebody buys today, can you, as a real estate broker say, "You'll meet your economic demands in a couple of years?" It's easy to select areas in New York City that have potential, but the question is, "What potential, for whom, and at what price?" The real estate market in 2004 was extraordinarily good. Now national studies show New York City seriously lagging behind other regions. This pattern may be devastating from a long term socioeconomic point of view.

Instead of Condo Tours to promote properties at super-luxury prices, the industry should reexamine and revise its basic "modus operandi."

Although New York's real estate industry is not a social or planning agency, it can suggest to sellers and buyers that they seek sources of marketing information and financial advice.

This, along with broadening the market by diluting the "luxury" and adding more "moderate" into the mix can produce an industry that is healthy, stable, and profitable for both buyers and sellers in the metropolitan area, lessening the "buyers, builders beware" condition.