Prices of raw land leave earthly orbit: Developers make heroic assumptions on how much people will pay for Manhattan condos.

Crain's New York reports:

As several developers race to erect 1,000-foot-plus residential spires on modestly sized plots, and the asking prices of individual condos stretch nearly to the nine-digit mark, raw land has become the hottest commodity in town.

In Manhattan, prices per buildable square foot—the amount of property that can be built on a given site—have jumped by nearly a third in the past year, and have more than doubled since the recovery began in late 2009, according to data from Massey Knakal Realty Services.

With buyers flocking from all over the world to pay so much for bare earth, many real estate professionals predict that some are overreaching.

The challenge facing these buyers is whether they can net the apartment sales necessary to justify the escalating land costs—a substantial gamble, considering the apartment prices some recent land purchases have been predicated upon.

Can you say bubble?