Are you talking a modern condo? If so I believe it. If not, you can find places for cheaper than that. Put it this way last month I rented a 1BR in a Chelsea brownstone for $2,000/month (which is generally more expensive than Midtown).
But think about those numbers for a second. $2500/month is $30,000pa or a 3% gross return, even less once you factor in maintenance. To put that in perspective, 5% gross return seems to be the benchmark in Australia (although in Australia there tends to be a tradeoff between capital growth and annual income).
In London I've seen the gross return be 10% or even higher.
So who would invest $1 million for a <2% gross return? That's nothing but a bet on future capital gains. In other words it's speculative. So the question is: is that sustainable (meaning will rents go up to match) or unsustainable (meaning prices will stagnate or go down)?
On a side note, some may consider it strange that I'm talking about the rent figure as a return. I've certainly spoken to many people who can't look past the speculation but that income is really important as it does relate to the asset price. They simply can't get too far out of whack sustainably.
Commercial or industrial property tends to be judged much more on viewing the property as an asset that generates income (Las Vegas casinos notwithstanding).
I lived in NYC during 2009-2010 and looked at a number of rental 1BRs under $2000 in Chelsea/Flatiron/Murray Hill & that area around Gramercy that isn't really Gramercy.
I wouldn't say the buildings were falling apart but they did have dated architecture, and not dated enough to be classic. (think 70s/80s).
Likewise, I thought it would be a good time to buy, and there are a lot of 1BR < $600K in those same areas. Also, Upper East Side towards the river had similar "deals." Oddly enough, I feel Morningside Heights is overpriced, probably because there were so many TimeOut NYC style articles about how it's great for gentrifiers.
Maintenance fees were indeed always too expensive, but was more around $600.
Your prices do apply, but more to brand new buildings, or buildings in "hot" neighborhoods.
In midtown, that 1BR will run you ~$2,500 to rent and close to $1 million to buy.
Maintenance fees should also be higher, at least $800.