If the real estate market during the Great Depression is any guide, then property-owning Manhattanites will be waiting a long time for home prices to get anywhere near their bubble-era levels.

Tom Nicholas and Anna Scherbina have constructed an index of home prices in Manhattan between 1920 and 1939 which shows that -- unlike most other parts of the U.S. during the 30's -- home values in the burrough flat-lined, falling

by 69 percent to reach a new low at the end of 1932 and hovers around that value until the end of the 1930s. A typical house bought in the beginning of 1920 would have retained only 50 percent of its initial value two decades later.

Here is a chart comparing the Case Shiller New York-area index with the nominal Depression index.

It's not a completely apples-for-apples comparison since Case-Shiller covers repeat sales of single-family homes for a much broader region than just Manhattan. But using sales price data from Miller Samuel for Condos and Coops in Manhattan after 1996 gives you a very similary picture.

Nicholas and Scherbina report that it wasn't until 1960 that housing prices recovered. But one thing that New York had going against it was that even though home values had fallen by over half, property values were not reassessed at their new lower values. So, homeowners wound up paying more in taxes relative to market prices:

Thus, a home owner who would have invested in a house on the eve of the Great Depression would not have recovered the full value of their investment until four decades later.