Residential market has yet to find how high is up.

There is presently no end in sight for the upward spiral of residential real estate in Manhattan. Buyers, sellers, brokers and lenders are in a holding pattern of powerful confidence that 1998 will bring more of the same explosive activity that has dominated the residential market for the past two years.

Conditions hear out that confidence. Demand is unflatering. Prices are continuing to rise. Low mortgage rates continue to lure move-up buyers into the market and enhance the home ownership picture (along with the soaring price of rentals) for those seeking to become first-time buyers. Sellers are getting their asking prices - or very close to it - and multiple offers and bidding wars are still occurring with extraordinary intensity. Perhaps most telling of all is that New York's sidewalks and skyline will again be seeing the construction of new luxury residential buildings.

Dependent upon location, residential properties are either hot or incendiary. Downtown, particularly areas such as Gramercy and SoHo, with their relatively smaller supplies of housing when compared with the Upper East or West Side, are extremely hot, so much so that areas previously viewed as borderline residential are experiencing a resurgence of interest.

Within housing categories, larger, family-size residences of three bedrooms or more are among the strongest segments, with no lessening of demand in sight. While the upper end of the luxury market is showing some signs of leveling off, sales in studios, one- and two-bedroom apartments, which tend to lag behind other indicators, are still growing and remain brisk.

The strong economy and Wall Street continue to drive the market, as young Wall Streeters, flush with record salaries and bonuses, continue to invest in large, showplace residences,

Families, families and more families are the other strung influence fueling the market. Couples with children are no longer making the knee-jerk decision to head to the suburbs to obtain instant "quality of life" for new or growing families. Instead, with crime down, schools improving and the economy strong, they are seeking to provide that quality of life (and quality of time with their families) by eliminating tedious, tune- and energy-draining commutes, while taking advantage of the rich educational, cultural and lifestyle amenities of New York by remaining in the city.

It's not just. New Yorkers with families that are fueling the market. There is also a small but, growing trend of suburban families with two working parents reversing a route previously taken and seeking to relocate back to New York, drawn by the same "only in New York" lifestyle that is keeping residents in place.

After location and space, what amenities and residential features are commanding the strongest interest? For families, it is those buildings which welcome children (and often their pets) with not only friendly attitudes, but also with child-centric amenities such as indoor play-rooms and protected outdoor play areas.

For those in the luxury category, plain vanilla space - no matter how large - will take a back seat to residences with large kitchens complete with professional stoves and refrigerators, luxurious marble and/or tile bathrooms, wood flooring, high ceilings, architectural detail, ample entertainment areas, buildings with pools and other athletic facilities, concierges and 24-hour doormen - all of which top the list of "must-haves."

Residences that are pre-wired to accommodate today's information technology are another priority fur today's full-time or after-hours work-at-home buyers.

Will 1998 be another year of record highs for residential real estate? Will the market continue to experience gains similar to 1997, where prices for comparable properties sometimes rose as much as 30 percent in a few short months?

The double-digit tumble real estate took in the recession after the highs of the `80's cannot be far from the minds of anyone in the relentlessly cyclical real estate business, where the reality that what goes up, must come down is absolute. The only variables are when the next slow-down will begin and by how much will values fall.

Conditions in '98 are, of course, different from '87, with more checks in place in the stock market and less speculative building creating a better foundation for sustained growth. All indications point to a continuing healthy economy in 1998, which will serve to maintain and extend buyer confidence - two major market conditions that will ultimately decide how high is up in Manhattan residential real estate.