If you're cruising through the International Contemporary Furniture Fair in New York this week, stroking the buttery leather Italian chairs, coveting the coolest couches--and wrinkling your nose at the design world's inevitable excesses--you'll come upon a one-room "house," all glass and wood, filled with nifty, well-priced furniture from Blu Dot (page 64). But don't just check out the urbane modernist chairs and chests: pay attention to the sleek little structure itself. Designed by architect Charlie Lazor, one of Blu Dot's trio of founders, it's a sample of Flatpak, an ingenious system of 2-D panels that, like their furniture, can be shipped and assembled on-site into a well-crafted prefab house in far less time--and for less money-- than it would take to build from scratch. It may look handsomely unassuming sitting in a cavernous trade show, but trust us: it represents the first revolution in American housing in decades.

You can't measure this mini-phenomenon in numbers. Of the more than 1.18 million new houses built in the United States last year, "modular" units accounted for only about 3 percent--and that includes double-wides. But with Flatpak and its ilk, we're talking about architect-designed dwellings. These houses can have either flat or pitched roofs, but either way they're unabashedly modern--which is not just a statement of style, but of values. Designed in reaction to the overblown developer houses that dominate the market, quality modern prefabs tend to be smaller and more energy-efficient, with open, flexible spaces. While the number of such innovative prefabs sold last year would barely make a ripple in the housing pool, consumer interest is rising fast. "There's more demand than supply right now," says Michael Sylvester, who started the Web site in 2003 and now gets 45,000 visitors a month. When Allison Arieff, editor of Dwell magazine, wrote the book "Prefab" in 2002, most projects she found were in Europe--or on the drawing board. Today she says she's bombarded with inquiries. "It's been a bit of a surprise."

Skyrocketing real-estate prices are obviously pushing people toward new housing ideas, but so are simple demographics. Shelter-magazine editors, who've been avidly covering the prefab trend, understand what developers don't: that young urban professionals who shop at IKEA and Banana Republic may not want a mini-McMansion when the time comes to buy their first house. In fact, Flatpak's Lazor, who lives in Minneapolis, and architect Michelle Kaufmann, who's based in San Francisco, were each driven to design their first prefab because they couldn't find what they wanted to buy in their price range. "This came out of my utter frustration with insanely inefficient and insanely expensive houses," says Lazor. "Prefab is for people who are busy but have a good design sense," says Kaufmann, who once worked for Frank Gehry in Los Angeles. "They want to live in a clean, green space they can afford, both in terms of time and money." Kaufmann now has 36 of her Glidehouses under contract, and she's just introduced her Breezehouse, a model entirely built in the factory, right down to the towel rods.

After a Kaufmann modular house is completely tricked out, it's shrink-wrapped and trucked to a site with a prepared foundation. While modular houses typically offer certain options, a panel system like Flatpak's allows greater variations: the eight-foot panels can be built of different materials--glass, wood, cement board--and you can keep adding to make a house as large as you want.

On the other hand, architect Jennifer Siegal, founder of Office of Mobile Design in Venice, Calif., started small. She was inspired to design prefab when she lived in North Carolina and noticed "all the manufactured housing" (read: trailers) "and just how terribly underdesigned it was, to put it politely." She's now created both a modular home--the Portable House--completed at the factory, and a kit that's assembled on-site--the Swellhouse--whose walls "snap together almost like LEGOs." Siegal has designed both to be "open and airy," and to use environmentally correct materials wherever possible.

Still, despite these architects' good intentions, there are obstacles. Neighbors hear "prefab" and think "trailer park." Local building codes vary, and sometimes zoning boards balk. Lazor has tried to avoid some of these issues by designing Flatpak so the wiring and plumbing are done by local tradesmen. And though prefab is meant to be more affordable than on-site construction, it's not always cheap. Kaufmann's smallest house is only 674 square feet and can be built for as little as $132 per square foot. But a competition-winning prefab design by Resolution: 4 Architecture, intended to be built for $100 per square foot, ended up costing about $175. And outside St. Louis, Lindal Cedar Homes has built its first prefab design by award-winning Seattle architect James Cutler. An elegant, ecologically sensitive lakefront spec house, it's priced at $979,000. So far, no takers.

Pessimists point out that designer prefab movements have sprouted before and never taken root. But Kaufmann, for one, is optimistic. "People are expecting more from design now," she says. "And we can e-mail drawings. I couldn't have handled 40 prefab clients like this 20 years ago." For a little perspective on that point, we need only look at architect Ralph Rapson, now 90, who designed one of the famous modern Case Study houses in 1945--and is now at work adapting it as a prefab house for a 32-year-old developer in North Carolina. To us that says good ideas never die.