Where do the Nye'Caelona Elves live?

I see the city and the crafting area beneath but where are their houses/tents/sleeping bags? Is there some city I haven't found yet?

If you go to the gardens and fly up the waterfall there is what appears to be a city wall, maybe next xpac we will see the actual city. For now this is where I believe they live.

That's why the young elf left and you have to chase him around for your scout epic, there was nothing to do and nowhere to live.

if you read the quest line, you would discover that's where they landed after they left their previous home due to massive die-off of their lands and poor leadership, and lost several elves on the way to Nye"Caelona.. Those are supposedly the elves that are left, who one day hope to return to their previous lands, or new lands with much growth, even though they fare fine, as they learned there is even a little bit of magic in the desert too. Though, you are right, I do hope to either see their previous lands and an elf city in a future expansion, maybe to fight what killed their lands in the first place and return them to their rightful place (the ones who haven't grown accustomed to slugs, goblins, and iksars anyway...).

Geomancers... they can make a home anywhere. Gives new meaning to my bed is as hard as a rock.

Here, want to get a song stuck in your head? When you say those elve's name, think of My Sharona.

Yep, that came to mind the first time I saw it.

Someone on voice chat invariably sings that when we are headed that way.

Elves don't sleep in beds... they're carried to dreamland on the soft fuzzy backs of fae drakes all night.