NEW YORK CITY-While the rest of the country is experiencing a cooling condo craze and a weakened housing market, the city's multifamily market continues to strengthen. In fact, Dottie Herman, CEO and president of Prudential Douglas Elliman Real Estate, says New Yorkers merely "blinked" at reports of an impending crash and went back to business.

At the Associated Builders and Owners of Greater New York Inc.'s monthly luncheon, Herman outlined why New Yorkers didn't look twice and what keeps the city's multifamily market strong.

"New York is a destination where people want to be at," Herman said. Four generations of buyers and sellers are part of this market and all of them are actively acquiring property. But unlike many other types of real estate, condos are not bought to be promptly sold, a factor that adds to the strength of the product type. "The people that buy real estate don't buy it to flip it," Herman said. "They buy it because they want to enjoy it, they want it for bragging rights because everybody wants a piece of New York City. They buy it because they believe in it."

The changing mentality of the population is also aiding the situation. She said the thinking used to be: my kids are gone, why do I need all this space; while now it is more along the lines: my kids are gone, now I can buy my dream house or a second or third home.

According to Prudential Douglas Elliman Q4 2006 findings, sales prices grew by 3.2% in 2006 to an average of $1, 224,840. Price per sf fell slightly to $998 in Q4 compared to $1,002 from the year before. The fourth quarter posted a 5% drop in both sales price and price per sf.

Still Herman is confident the market remains strong, even if value is slightly less. Sellers will call her and say a property dropped in value from $2.6 million to $2.46 million in the last year; but when the property was purchased for $.5 million this year's selling price is still impressive. "Where would you ever, ever get those kinds of returns," Herman asked.

The market, Herman compares to driving 85 mph and slowing to 55 mph near a state trooper. From 85 mph "It feels like you're not even driving the car anymore," but you're still moving at 55mph.

She predicts 2007 will be another strong year.