Manhattan's apartment market is heating up in the busiest season for moving, sending rents to a five-year high and shifting the advantage back to landlords after a brief respite for tenants.
The median monthly rent rose 3.1pc in May from a year earlier to $3,300 – the highest since February 2009, according to a report by appraiser Miller Samuel and the brokerage Douglas Elliman Real Estate.
The vacancy rate, meanwhile, slipped to 1.58pc from 1.6pc.
Rents are rebounding after a six-month slide that started in September, when a surge in home sales helped push up apartment vacancies.
Rigid mortgage standards and higher prices are tipping would-be buyers into the rental market, while employment growth is increasing the pool of potential tenants, said Jonathan Miller, president of New York-based Miller Samuel.
"Weakness in the rental market was short lived," Miller added in an interview. "This pent-up demand from purchasers has been worked off and more people are getting hired. Rents tend to react more to rising employment than purchases."
New York City added 75,000 jobs in the 12 months through April, according to the state Labour Department. The unemployment rate was 7.9pc, down from 8.8pc in April 2013.
The months from May to September are typically the busiest time for the rental market because college students graduate and get jobs and families settle down into new places before the next school year starts.
After referring in March to the New York market as "being on the pause button," David Santee, chief operating officer of Equity Residential, said last week that the city is "gaining momentum."
His Chicago-based company is the country's largest publicly traded apartment landlord.
At Equity Residential's 30 New York properties, rents are up 4pc from last year and apartments are almost 97pc occupied, Santee said at a conference in New York.
Homebuyers last year rushed to complete deals as a spike in mortgage rates from near-record lows in May threatened to make homes more expensive.
In the fourth quarter, Manhattan condominium and co-op sales reached the highest total for the period in 25 years of record-keeping, according to Miller. That meant landlords were facing higher vacancy rates and offering concessions.
Last month, 7pc of new leases included incentives to entice tenants, down from 9pc in April and the lowest level since October, according to Citi Habitats. Those offers will continue to dissipate, said Gary Malin, president of the brokerage.
"Negotiability isn't as high as it was," Malin added. "This is busiest time of year and there's limited inventory.
"Tenants need to act quickly. An hour or a two-hour delay could mean that you lose the apartment."