They are a top 3 team in the world when they perform at their very best. We are more consistent and more likely to win, though.
Real are not consistent, they can't compete with us over 38 games. But they are highly dangerous in the CL, for they don't need consistency over many games there. Their top level is such that they can do damage anywhere, as their recent big wins at Anfield and Camp Nou have shown. They are the only team in the world that can match us technique wise.
City can be truly exceptional at home though. Thus a big win is definitely possible. I'd take a 2:1 win, though. No need to be greedy :)