New York City was ranked 13th most expensive city in world. Top 5 includes Tokyo, Osaka, London, Moscow and Seoul. With the weak dollar, and current trends (NYC allure), it isn't a big surprise more and more people (foreigners) are moving into New York. It's cheap!
you have to realize that there are lots of jobs and careers that are not possible in any other city. most, if not all of my friends who live there are basically locked into living in new york city. i even know people who have moved to the west coast and commute to new york city to work. real estate in new york is no bubble, it's just supply and demand. little supply and lots of demand.