NEW YORK CITY-How long can New York's real estate market remain hot? That was the main question real estate professionals discussed last week during the Fifth Annual RealShare New York conference put on by Real Estate Media, the parent company of GlobeSt.com and Real Estate Forum.

Though there are signs of what could lead to a potential downturn, such as rising interest rates and construction costs as well as prohibitive housing pricing for middle-income residents and the threat of another terrorist attack, speakers were generally upbeat about the state of the market, at least in the near term. "There are cycles in the real estate business, up and down," said Steve Siegel, CB Richard Ellis' global chairman, speaking during the New York Power Panel session. "I don't think I've seen the market in a better place, a better position."

In fact, there have been $9 billion of office properties sold in Manhattan so far this year, and with another $2 billion under contract, last year's $12-billion transaction record is on pace to be broken, pointed out Michael Desiato, Real Estate Media's group publisher and editorial director, during his opening remarks at the conference. Said Kent Swig, president of Downtown building-owner Swig Equities, "We'd love to buy some properties."

A lot of the growth is due to demand from tenants looking to enter large, class A spaces in the market, speakers said. Law firms and financial institutions are among the companies looking for space in Manhattan. "The business is really driving the market today as opposed to trying to figure out where the market is going," said Ken Krasnow, executive director of brokerage at Trammell Crow Co.

Some of the pitfalls that developers face include a lack of sites, high construction costs and rising taxation. "It's going to be difficult to continue to build office buildings that are taxed $25 to $40 a foot," said Steven Spinola, president of the Real Estate Board of New York, explaining that offices pay 46% of the city's property tax but only make up 24% of the supply.

The strong demand the city faces also has a downside. High residential rents are out pricing out younger residents with entry-level jobs and lower-income citizens whose jobs keep the city running. "We need to address affordable housing in the city," said Josh Kuriloff, an executive vice president at Cushman & Wakefield.

And of course, everyone's worst fear still lingers as a possibility. "I would be more concerned with another 9/11 than us getting ahead of ourselves in the industry," said Geoffrey Rice, director of CBRE/Melody.