Starting your own business? Need some extra space for your needlepoint habit? You're in luck ... office space comes cheap these days. In fact, rent for office space is sliding lower at the fastest rate since 1995. In the third quarter, office rents dropped 8.5% on a year-over-year basis.

Falling prices typically go hand in hand with falling demand and in fact, vacancies are on the rise as layoffs increase. New York-based real-estate research firm Reis says the office vacancy rate has hit a five-year high of 16.5%. Last quarter, tenants returned 19.6 million square feet of commercial rental space to their landlords.

Manhattan apartment rents fell as much as 10% in August, on a year-over-year basis, according to data compiled by the Real Estate Group of New York, with concessions by owners widespread, Bloomberg News reported Wednesday.

This is not an abstraction: buildings large and small are showing gaping vacancies. Storefronts are empty. Entire buildings sit waiting to be occupied. In Manhattan, retail vacancies have reached their highest rates since 2001. For the second quarter of this year, vacancies hit the absurd height of 12.4%, thanks to unemployment trends that won't quit and consumers reluctant to pry open their wallets.

Retailers are being hit just like the residential market.

Apartment vacancies in the United States hit their highest level in 22 years in the second quarter of 2009. Job losses are to blame, according to Bloomberg, as tenant demand falls when people don't have any income. Vacancies rose to 7.5% from 6.1% year-over-year, according to Reis Inc. But this still doesn't reach the 1987 level of 7.6%. In June, the U.S. unemployment rate hit a 26-year high, with payrolls dropping faster than expectations.

Conventional wisdom has it that potential homebuyers turn into renters when the job market softens. The rental pool is shrinking, however, leading to the high rate of apartment vacancies as landlords struggle to fill units. Asking rents for apartments fell 0.6% last quarter (for the second in a row), according to Reis, the largest fall since the company started to track this measure in 1999. Overall, asking rents (including other types of residences) were off 0.7% year-over-year, down to an average of $1,040 a month.

The New York Times has a really cool new tool to help you decide whether to buy or to rent a home. Of course, the standard personal finance advice is that you should buy if you can but, with real estate markets softening of late, many renters are coming out of the woodwork to brag about not buying at the top of the market.

Here's how the screen works: You plug in the price of the property, the monthly rent you would have to pay, the down payment, the interest rate, and the property taxes. Then, you can tell it how much you expect real estate to appreciate on average each year and how much you expect rental rates to increase. Of course, this is not an exact science, but even being in the neighborhood will give you some idea. Then, it tells you how many years you would have to stay in the home for buying to be a better deal than renting. Pretty cool, huh?

In the article accompanying the tool, the New York Times proclaims "A Word of Advice During a Housing Slump: Rent." This could be seen as a contrarian indicator, or a sign of a bottom in real estate. Oftentimes, mainstream media outlets seem to announce that a downturn is in progress right at the bottom of the market. For instance, in 1979, Business Week ran a cover story entitled The Death of Equities, warning investors to stay away from stocks forever. Of course, that was right before the beginning of a two decade-long bull market.

So rather than rely on the New York Times advice, I would simply use the calculator to get an idea -- and if you're going to be staying put for awhile, buying is probably the best choice. Whatever you decide to do, I certainly wouldn't not buy a home because pundits say prices haven't fallen enough yet.