Mea Culpa
There's a nice post in the comments section from Pam, who gently reminds me that I used to defend the strength of the Greenwich market. It's true, I did: I did point out what I thought were over-priced houses, and cautioned that, obviously, prices couldn't keep increasing 20% per year, every year, but I was fond of saying that, so long as NYC continued to attract the best, brightest and most ambitious young people from around the world, they'd continue to meet, fall in love, have babies and look toward the suburbs to raise those babies. Because Greenwich is one of the best of those suburbs, I was pretty confident that we'd continue to get our share of new blood, and buyers. But "No one expects the Spanish Inquisition" and I didn't expect the collapse of the credit market and the subsequent downturn on Wall Street. Greenwich never had many sub-prime mortgages or large spec developments to begin with so when the sub-prime lenders and real estate speculators started to topple I thought the disaster would be limited to places like California and Florida. Wrong.

But, long term, I still like our position. There will always be money to be made lending to millionaires, and we're still not adding any new land, so I expect to see a recovery not too long in the future (unless Wall Street and its bankers disappear and the financial world shifts to Dubai, a not entirely impossible scenario). If you own a house that you want to sell, hang on and hope. If you're thinking of buying, I'd look silly suggesting that prices won't continue falling, but as interest and construction costs keep rising, you might want to grab a good deal now - if you don't have to resell in the next few years, I think you'll do just fine.