Manhattan real estate hits wall - Big Apple prices are treading water after years of big gains. Will the rest of the nation follow?

Ya know, $1.2 Million for a 2-bedroom apartment seemed a bit high, didn't it? DIDN'T IT?

Manhattan real estate may have hit a wall -- albeit a very high one. The last half of 2005 saw home prices lag, according to two new reports from Manhattan brokers.

According to Prudential Douglas Elliman, the median sale price for co-ops and condos in Manhattan rose just 1.3 percent in the fourth quarter of 2005, to $760,000. The Corcoran Group found that median sales price declined during the quarter, with a 4 percent slide.

Because Manhattan sales had soared during the first half of the year, however, gains for the full year were still hefty at more than 20 percent. In addition, both brokers noted an uptick in the market at the end of the year.

A two-bedroom apartment now costs a median average of about $1.2 million in Manhattan, according to Corcoran.

The Manhattan slowdown comes on the heels of similar drops in the third quarter in some of the nation's most expensive real estate markets. Boston and other Bay State areas, many California markets, the Washington D.C. area, and suburban New York counties, all recorded lower or flattening prices, according to National City, a financial holding company.