Manhattan rental prices hit two-year high

Despite an economy still struggling to recover, real estate in Manhattan continues to bustle at an increasingly lucrative pace, according to a new report from Prudential Douglas Elliman Real Estate.

The average rent reached $3,778 in the second quarter of 2012, up from $3,650 in the first quarter and from $3,465 in the second quarter of 2011. Studio and one-bedroom apartments accounted for the vast majority of the increase, jumping 15.4 and 8.5 percent, respectively.

With prices on the rise, many tenants were on the move in the hopes of cheaper deals. The report noted a 27.9 percent increase in inventory from the second quarter last year.

The high prices are good news for rental property management companies, particularly coming on the heels of a statement from Mayor Michael Bloomberg that he'd like to see designs for a building that features more practical, 300-square-foot apartments.

"Today there are about 1.8 million one- and two-person households in our city, but there are only about 1 million studio and one-bedroom apartments," Bloomberg said in his statement.

Units of this size would fall under current regulations for minimum apartment size, but Bloomberg added that he would waive the regulations to increase the number of apartments.