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The Hub's Real-Time Apartment Vacancy Rate

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Here's the latest installment of Bates By the Numbers, a weekly feature by Boston real estate agent David Bates that drills down into the Hub's housing market to uncover those trends you would not otherwise see. Check out his ebook, Context: Nine Key Condo Markets.

Demetrios Salpoglou sounds like he is close to putting up a large fluorescent "No Vacancy" sign in front of several Hub neighborhoods. It's not the time of year where we see a surge of apartment seekers, but if you have zero apartments to rent in an entire city neighborhood, it might be polite to communicate the lack of inventory with a roadside sign, LOL.

Time and again, this column has pointed out how low the Hub's sales inventory is, but today Salpoglou, the CEO of arguably the largest rental brokerage network in New England, tells me the current rental inventory is also razor thin. The 125 or so agents who work in his three brokerages are relentlessly updating the availability of more than 100,000 Greater Boston apartments in the company's database and it's the integrity of those numbers that allows him to determine something he calls "real-time vacancy."

Today, for instance, the real-time vacancy for Brighton is just 0.7 percent. In other words 99.3 percent of Brighton's apartments are currently occupied. "This is an amazing stat," Saloglou notes, "crazy low."

The real-time vacancy for Allston is also "crazy low." Apparently, the apartments in both Allston and Brighton are about as full as you will be after you eat your Thanksgiving dinner.

Brookline and Back Bay have a real-time vacancy of 1.2 percent and, although that number might sound comparatively high, it's not uncommon for professional investors to project vacancy at 5 percent for their pro-forma—which is a rate that is four times the vacancy of these neighborhoods. Heck, the real time vacancy for the entire BostonPads.com database, more than 100,000 apartments, is only 2.3 percent, less than half a typical pro-forma vacancy rate. Incredible!

While Salpoglou's estimation of vacancy in the city has gone down, the amount of rentals available in the region's multiple-listing service has gone up. Yet, Salpoglou says that MLS is too small a sample size, and that his database typically has 10 times the amount of apartments found on MLS. He also stresses that "people tend to put higher-priced apartments on MLS."

One segment not included in Salpoglou's numbers are luxury buildings with internal leasing staffs. Because there are no real-time vacancy numbers to provide insight on the current luxury market, I contacted Nick Reynolds of Longwood Residential, an agent who is always keeping close tabs on the Class A apartment market.

Nick has specialized in high-end rentals for more than 12 years and has also rented to more than a few Red Sox players and coaches. In regard to the better Fenway and Back Bay buildings, he said, "The Class A luxury market has more vacancy this year and we are beginning to see both concessions and broker fees slowing coming back." Having the buildings pay the fee is a trend Reynolds says he expects to continue because there are so many new high-end rental buildings hitting the market in the next couple years.
· Our Bates By the Numbers archive [Curbed Boston]
· Our Renters Week 2013 archive [Curbed Boston]