By site of manifolds Man, I mean the category of manifolds (maybe submanifolds to obtain a small category) with continuous maps between them. A Grothendieck topology is given by open covers. Actually, I am more interested in the corresponding smooth site but the question may be posed for both.


Daniel Dugger states this (implicitely) in "Sheaves and Homotopy Theory" (<http://math.mit.edu/~dspivak/files/cech.pdf>) by saying that Cech weak equivalences of presheaves on manifolds can be detected stalkwise. However, this paper is unfinished and the proof is missing. In the paper "Universal Homotopy Theories" he uses the hypercompletion of presheaves on manifolds instead.


In "Differential Cohomology in a cohesive (infinitiy)-topos" (<http://ncatlab.org/schreiber/files/cohesivedocumentv032.pdf>) Urs Schreiber proves that the subsite consisting of the manifolds R^n is cohesive which implies that it is hypercomplete. However, the proof cannot be generalized since there are non-contractible manifolds.


Since hypercompleteness is a local criterion it suffices to check that the subsites Man|X (overcategory) are hypercomplete. In an attempt to prove this, I found a criterion in HTT saying that an (infinity)-topos which is locally of homotopy dimension <=n is hypercomplete (7.2.1.12) and I hoped to show this for simplicial presheaves on a subsite Man|X (every manifold in such a subsite has the same dimension) using that the (representables of the) contractible open sets generate this (infinity)-topos under colimits. But I failed to identify the corresponding overcategory since this should be the (infinity)-overcategory.



Is the site of (smooth) manifolds hypercomplete?
I think your idea to reduce the question to small slice topoi works perfectly. I will use it to show that every sheaf on $Man$ (either the continuous or the smooth version) is the limit of its Postnikov tower. This implies that the topos is hypercomplete since truncated objects are hypercomplete.


Let $F$ be a sheaf. Since limits are computed objectwise, we must show that for every $M\in Man$, $F(M)$ is the limit of $\{(a\tau\_{\leq n} F)(M)\}$, where $a$ means sheafification and $\tau\_{\leq n}$ objectwise truncation. Given $M\in Man$, let $Open(M)$ denote the small site of $M$, and let $i: Open(M) \to Man$ be the forgetful functor. The key is that the restriction functor $i^\ast$ (on presheaves) preserves sheaves and commutes with sheafification; I guess this is intuitively obvious, but as David points out in the comments to the OP we must be careful with intuition here, so I will explain in more details below. Assuming this, we get


$$ (a\tau\_{\leq n}F)(M)=(a\tau\_{\leq n} i^\ast F)(M).$$


We know that $Sh(M)$ is locally of homotopy dimension $\leq dim(M)$ since objects of $Open(M)$ have covering dimension $\leq dim(M)$, so that $i^\ast (F)$ is the limit of its Postnikov tower in $Sh(M)$. Evaluating at $M$ gives what we wanted.


This argument even shows that "Postnikov towers are convergent" in the topos of sheaves on $Man$, in the sense of HTT (which is stronger than just saying that sheaves are limits of their Postnikov towers, and much stronger than hypercompleteness).


Back to the claim that $i^\ast$ preserves sheaves and commutes with sheafification. Descent is equivalent to Cech descent for open covers so it's clear that $i^\ast$ preserves sheaves. To prove that it commutes with sheafification it suffices to show that $i^\ast(S)\subset T$ for some classes of maps $S$ and $T$ such that sheaves on $Man$ (resp. on $Open(M)$) are the $S$-local (resp. $T$-local) presheaves. We can use for $S$ and $T$ the classes of maps of the form $F\to \tilde F$ where $F$ is a simplicial presheaf and $\tilde F$ is its *degreewise sheafification* (see Dugger-Hollander-Isaksen, Theorem A.6). That $i^\*(S)\subset T$ now follows from the fact that $i^\ast$ commutes with sheafification for sheaves of *sets*.


