February is traditionally the slowest month of the year in Manhattan real estate, a month known for giving renters a chance to find deals. In Februaries past, landlords offered more concessions in order to stimulate demand. This year, the opposite happened. Even given the context of low inventory, few new apartments coming on the market, and high demand, February still exceeded expectations for apartments in every Manhattan neighborhood. Landlords cut back on concessions and raised rents, and the high temperatures brought out far more renters than expected; the high volume of activity far surpassed traditional winter levels. If this is any indication, rents for apartments in Manhattan will keep rising in the spring, the busiest season of the year.

Insatiable. That’s one word to describe it. While renting an apartment in Manhattan is not everybody's cup of tea, demand continues to be high while inventory continues to be low. According to the U.S. Census, the population in Manhattan currently hovers at around 1.6 million residents. However, this number neglects to factor in the other 2.4 million commuters, day-trippers, hospital patients, tourists and students who may pass through Manahttan at any given point during the work day, reported the Rudin Center for Transportation and Management at New York University. And on major holidays and special events such as the Macy’s Day Thanksgiving Day Parade, that number easily surpasses 5 million. At the current rate, the population density in Manhattan could rival that of Hong Kong’s by as early as 2030.

The MNS rental market report for the month of January is out, and much like in December, it shows a market that has conformed to expectations and dipped, but that is still much stronger than it was a year ago. Generally, the cold winter months keep market activity to a minimum, but average rent for all luxury Manhattan rentals dropped only 0.4% from December to January. Prices in December were down 1% from where they were in November, suggesting that, while the market has sagged a bit, it is by no means as low as it was last year, or as low as industry professionals were expecting. In fact, rent rates are up an average 7.2% from where they were in January 2011. If you’re looking for another sign that the Manhattan rental market has improved substantially, here it is.

Let’s start this post off with some basic economic theory. As we’ve written before, inventory on Manhattan apartments for rent is at an all-time low. Landlords are receiving multiple applications for their apartments, and waiting lists have gotten as backed up as having twelve people on them. With demand skyrocketing and supply scarce, basic market laws tell us one thing: prices for apartments are going to be high.