After leading the Barclays Premier League for most of the season, City now trail arch-rivals Manchester United by three points with eight games remaining. With a derby at the Etihad Stadium to come next month, City's fate still rests in their own hands but Reid believes Sir Alex Ferguson's champions have again timed their run perfectly.
Reid, speaking at the Soccerex forum in Manchester, said: "I don't think Manchester United have been brilliant, they have dug results out - but that is Manchester United. The manager, whatever you say about the manager, has been there and done it. I thought City were going to win it in December, I thought everything was there, but now I have changed my mind."
He added: "I'm surmising Manchester United are going to win it, but I think it was a great chance for Manchester City."
Despite the qualities of veterans Paul Scholes and Ryan Giggs, Reid feels their presence in the United squad at the ages of 37 and 38 respectively should give City cause to rue a missed chance.
The former England midfielder, who managed City from 1990-93, said: "With great respect to the players - Ryan Giggs, Paul Scholes being a massive influence, I think it was a great chance for Manchester City.
"They are brilliant players, but at that age I am not sure this is the best league."
With United not in action again until Monday, City can reclaim top spot on goal difference if they beat Sunderland on Saturday.
After last week's frustrating draw at Stoke - and a sequence of just two away wins in nine - City are at least back on home turf.
City have won all 15 of their league matches at Eastlands this season, and a Premier League record 20 in succession.