Anything that makes money more scarce will affect the prices. NYC does attract a good number of foreign investors because of the strength of the Euro against the dollar. However, the city has not gone unscath by the current financial crisis. Inventory is up as well as days on market. The tightening of the mortgage market will affect the number of people eligible for mortgages. This will have a direct impact on the rental market. Rental prices are expected to rise as demand for rentals increase. In addition, an increasing number of multifamily units are heading toward foreclosure. Even Tishman is having trouble getting money for his Stuyvesant conversion project.
In short, if you are buying to live in the unit and qualify for a mortgage, there are deals out there. If you are buying strictly as an investment, you must do your due diligence. I suggest speaking with a mortgage professional and have him/her do a rent vs. buy analysis.
You can contact me off line to put you in contact with a savvy real estate professional in the Manhattan market.