The slump is over for the Boston Metro multifamily sector, as vacancy rates plummet and rents test new highs. According to the latest reports by Collier’s and Boston Bisnow, the Greater Boston apartment market has a vacancy rate of just 4.5%. This is the lowest vacancy rate since 2012.
With vacancies near record lows, rental income is surging. Renters in the Boston Metro are facing an 11% year-over-year increase in lease costs. Apartments in Boston’s city limits are running $3,000 a month or more, and apartments in the metro area running about $2,400 a month. A return of university students to campus, along with inbound workforce migration, has combined with frustrated home buyers to create a perfect storm of demand.
While there isn’t an apartment shortage in Boston per se, most of the newer units on the market are upscale developments in prime locations. Some of the asking rents are above $5.00 a square foot. It’s also fair to say that the cost of developing new units has never been higher, and those expenses are passed on in the form of higher rents.
Those who are looking to rent a Boston Metro apartment should consider opportunities in the South Shore area. Quincy’s Ashlar Park development will feature 465 units, and it is located within walking distance from an MBTA station.
Boston Metro real estate investors who are looking for opportunities should consider office buildings and mixed-use properties that could be converted to residential units. Not every building is suitable for such a conversion, and local zoning requirements would need to be explored. However, this can be a cost-effective alternative to building a new development from the ground up.
When you are ready to begin, relocate or expand your business, team up with the Jay Nuss Realty Group, LLC! Whether you are thinking of buying, leasing, or investing in Boston Metro commercial real estate, we can help you find the ideal property!