The number of homes sold in Manhattan was up about 1 percent in November versus a year ago and prices continue to appreciate. Median home prices in the borough rose 17.5 percent during the same period and 26.8 percent since November 2004, according to Gregory Heym, chief economist for real estate firm Brown Harris Stevens.

Demand for luxury properties in the city continues to grow, says Andreas Hoeferp, chief global economist at UBS Wealth Management Research. The number of $3 million-plus homes sold was up 6.5 percent year-over-year in November.

Real estate in the Big Apple could get even better. A projected $36 billion in bonuses will be doled out this year by the top five investment banks in New York — up from a record $21.5 billion in 2005 and nearly a fourfold increase from $8.6 billion in 2002, according to Options Group, an executive search firm.

"There's an incredible amount of money out there right now," says Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman. "It's not clear if that funnels into real estate, but it certainly can't hurt."

Source: The Wall Street Journal, Troy McMullen (12/15/2006)