Meanwhile, demand is increasing weekly. "Everyone's read Mankiw's arguments," says Rae Rosen, a senior economist at the Federal Reserve Bank of New York. "But one of the things that people forget is immigration, which has been a major force in the revitalization of neighborhoods in New York City. Only about five states in the country reap the benefits of immigration, but we're one of them."

The country is riding a 100-year high in immigration, and New York City becomes home to one out of every seven newcomers. The city is welcoming around 110,000 a year, up from about 85,000 in the last decade, and from a paltry 30,000 in the postwar forties.

"Immigrants," Rosen says, "don't buy in the traditional ways, perhaps. They're pooling money, and sometimes they have much larger households. But they still end up buying a house. They're pushing hard to get into the market. And that's just at the low end."

Rosen adds that "the Russian sector of Brighton Beach has moved into parts of Bensonhurst. If you drive through the area, you can't believe the kind of renovation going on." And it's not as modest as you might think, either, she says. "There are whole areas in Brooklyn that have million-dollar homes at this point that have been rebuilt by very wealthy immigrant communities. And you have stories coming out of the Hasidic community of extremely wealthy conservative Jews building multi-million-dollar homes in these small ethnic enclaves."

Then there's another emergent immigrant group that can't be overlooked: the huddled masses in Volvos swarming our shores from the distant lands of Pelham and Teaneck.

"The broad national dynamic that bodes well for New York City is that the first decade of the new millennium is going to be the era of empty-nesterhood," Hughes says. "People tend to leave New York City in the child-rearing stage of the life cycle. But we're starting to see a slight transition with the empty-nesters in the 3,000-square-foot suburban houses. The kids leave; all of a sudden the grass starts growing faster. They're rattling around the house. It's boring. You have this huge baby-boom contingent that is going to be trading sideways in the housing market. They're going to want amenities, activities, things to do, culture. We're seeing already that they're moving back to the city," Hughes says, adding dryly, "and I am known as the Dr. Kevorkian of the regional economy."

Finally, there is yet another not-so-huddled mass that's flocking to our New York -- typically, via the Concorde. They come from Europe, Asia, and South America, and they are looking for a Manhattan pad. That sector, loosely defined but quite real, has never been hotter, according to several in the industry.

"At the end of the American economic century, every other place is in trouble. Every other foreign market has been clobbered," says Clark Halstead. "But if you look at the prices of New York versus London, Paris, and Tokyo, New York's a bargain. So the 'flight capital,' as we call it, is coming here in many ways. First of all, it's being invested in American securities. But another way for 'flight capital' to roost is to buy a pied-à-terre in New York."

Still, New York's continued health is not purely predicated on the spending of fat cats, according to Stanley Moses, chairman of urban affairs and planning at Hunter College. Moses figures that even if the middle class has been largely priced out of Manhattan, the outer boroughs can play an increasingly dynamic role in the overall market's health.

"The fact of the matter is that with the rise of two-income households, both the husband and the wife now need increased access to the labor market of the city. This makes the outer boroughs especially favorable, because there you have cheap transportation and cheap taxes." Moses points out that local property taxes for, say, a $250,000 home in Nassau County will be two and a half or three times what they would be in Brooklyn or Queens.