No surprise, eh? The city's perennially tight inventory, coupled with that damned economic recovery, mean higher apartment rents ahead as more people hunt amidst a limited supply. The city's apartment vacancy rate, in fact, is down to 3.8 percent, its lowest in a decade, according to a new report from brokerage Marcus & Millichap. That easily rivals vacancy rates in places like New York and San Francisco. And, hate to break it to ya, but, according to the same report, "Boston employers will generate 46,000 jobs in 2012, an increase of 1.9 percent. Last year, employers created 11,700 positions." That means the vacancy rate should dip even lower just as Allston Christmas arrives in September.
And that means higher rents. We told you in April how Boston apartment rents were already up from early 2011. Marcus & Millichap says they'll go up another 4 percent this year. Jennifer Athas at The Herald has some anecdotal evidence that landlords are ready to pounce on this reality:
"I used to rent a studio in Back Bay for $1,400 that now rents for $2,100, and a one-bedroom that used to rent for $1,850 is now renting for $2,500." ... Carroll’s office recently re-listed a Fenway area apartment where the past tenants had been paying $2,500 per month for $3,000 and it took only two weeks to rent.
So 2012 is a wash for Boston tenants (and a boon to landlords). But what about beyond? Surely, all the new apartment construction sweeping the city will mean lower rents as supply catches up to demand? Right? Yes? No. The thousands of new apartments slated to become available in the next few years will do little to lower rents. It's complicated, but let's just say size does matter.
· Boston Rents Soaring [Herald]
· The Cheapest, Priciest Areas to Rent an Apartment in the Hub [Curbed Boston]
· Why the Hub Housing Market Could Get Worse, Much Worse [Curbed Boston]
· Boston's 5,000 New Apartments Won't Mean Lower Rents [Curbed Boston]
· Allston Christmas: the World's Biggest Unofficial Flea Market [Curbed Boston]