New York is an extremely large state in terms of population, although it is not especially large in terms of land area. This mean that New York real estate can be essentially dichotomized into two sections - the country regions of upstate and western New York State, and the metropolitan area and city core of New York City. The country and rural portions of New York state are generally immune to the nationwide economic recession, for one simple reason. The farms, ranches, and older homes in the New York State rural region are rarely on the market, simply because the properties in upstate New York are family owned, and less conducive to investment and “flipping”.

Manhattan, and New York City in general, however, have been hit extremely hard by the economic crisis precipitated by the collapse of the sub prime mortgage market in early 2008. The best explanation for this disconnect between the two different spheres of the New York Real Estate Market are the extremely high prices found in the city portion of the Empire State. Urban Digs, a real estate analysis site maintained by a number of New York professionals, reported the figures for the first two quarters of the year 2009, down nearly fifty percent from the same time in 2008. Noah Rosenblatt, a real estate agent in the Manhattan area had the following commentary to offer on the situation: “When you hear, 'sales volume plunges 50% from year earlier', you may immediately assume today's market is completely dead - not so.”

The Manhattan Real Estate Blog, maintained by Realtor Mitchell Hall, took a somewhat more negative approach to the figures reported. The Cocoran Report for the Second Quarter of 2009 found that in the last three quarters of activity, “Manhattan's housing market has experienced one of its most challenging periods in 20 years. In the wake of the financial crisis, home sales have slowed by half.” During the most recent months, however, there has been a glimmer of hope. Driven by a federal tax credit for first time home buyers, sales increased somewhat between the last two months, but there are no strong indications as to whether or not this trend will continue.