Our economy is improving: inflation is low, consumer confidence and spending are up, and corporate earnings are exceeding expectations. However, unemployment remains high, and we’re still at war. Nonetheless, the mood on Wall Street and the streets of Manhattan is buoyant. In these first few weeks of 2004, buyers are competing for a short supply of apartments, and they are stepping up to pay asking price or better—in sharp contrast to last January when Wall Streeters were worried about losing their jobs, and real estate buyers were watching from the sidelines, waiting for the other proverbial shoe to drop. It never did. At the start of this first quarter, things are looking positive, and the impact on demand from hardy and impatient New Yorkers is palpable. Additionally, interest rates are staying at low levels longer than expected. The 30-year mortgage is projected to average 6.4% this year, up modestly from 5.8% in 2003. However the supply of apartments, which has been short for the last 9 months, is shrinking even further. The declining inventory is giving sellers the advantage.