Since I do have business out in Brooklyn, I thought this was an interesting analysis of what happened there this year:
Brooklyn, Queens see big drop in home sales - Crain's New York Business
So volume went down while prices inched up. Sounds like a lot of people who didn't need to sell decided not to, leading to a bit of a shortage in inventory, which kept prices stable, at least at the higher end.
Larger apartments are what sold last year, while smaller apartments were hurt (this has been happening in Manhattan too, as detailed in November 2010 Real Deal).
The continued slump in studios seems to be causing falling prices. 1 bedroom apartments are doing better, although 2 bedrooms and above are where the real movement has happened.
So what does this mean for 2011?
My take remains the same: if you are in it for the long haul on your primary residence, it can't hurt to shop now while interest rates are historically low (but they have risen a bit this year, from the low 4% to around 4.875% so far). Could prices still drop? Yes, that's always a possibility.
For me, it's simple: The big "if" is whether we have actually completed the "toxic mortgage" mess, or whether we are in the eye of the storm. Pay close attention to banks this year. Another wave of foreclosures (not the ones already in process, but a new wave of delinquencies) could be a similar shock to 2008's mortgage meltdown, which could lead to a drop in prices.
At the same time, another tightening in the mortgage market would make it tough to buy a property even at lower prices. So be careful what you wish for.