Bubble Island

The housing bubble has become a geographical concept — and we're literally living in it. According to the first-quarter figures for 2007, as the national real-estate market chokes on unsold inventory, Manhattan prices continue to climb. An average apartment on the island fetched 6 percent more this year than in the last quarter of 2006, say Brown Harris Stevens and Halstead Property (the ultra-upbeat Corcoran reports a 12 percent jump).

But wait, there's more. Not only the prices, but also the number of sales rose. It appears that Manhattanites, or newcomers determined to live in Manhattan, tend to treat sky-high property prices as a kind of dare: the higher they go, the more we buy. Why such ostentatious, and growing, disconnect from the rest of the country? We've got Wall Street, that's why. The upward trend is especially evident in the upper reaches of the market, where bonus-happy financiers are seen shelling out more than ever (and 20 percent more than last year) for four-plus-bedrooms.

Market Strong for Apartments in Manhattan [NYT]