The New England Real Estate Journal reports that the Boston Metro area’s multi-family housing sector remains a hot commodity! In fact, trends are pointing to strong demand by both investors and tenants for the foreseeable future. Here are the facts you should know!
Thanks to limited inventory and low interest rates, investors are actively seeking multi-family properties for purchase. Sales activity has been on a steady climb for the past 2 years.
In 2011, Boston had 100 multi-family property sales; in 2012, Boston saw 167 multi-family property sales. This is the first time since 2007 that we saw consecutive increases in both the number of transactions and the total dollar volume.
Meanwhile, tenant occupancy of multi-family properties remains at all-time highs. Most of the Boston Metro area has little or no vacancy, which supports high rent thresholds. Tenant demographic trends suggest that demand will remain consistent. Here are a few reasons why:
1. Tougher residential mortgage requirements have made it more difficult for both former homeowners and prospective first-time buyers to purchase a house. During the housing boom, the ease of sub-prime mortgages caused tenant attrition. Now that borrowing money is not so easy, people are renting longer.
2. Recent college graduates are choosing to live close to their employment. They prefer urban living with access to public transportation, instead of living in the suburbs and relying on cars. This seems to be a lifestyle preference as well as an economic factor.
3. Empty-nesters and retirees are downsizing their residences. As home values continue to recover, we can expect to see more of these homeowners “cashing out” and transitioning to renting. They are drawn to low-maintenance living in urban areas that provide social opportunities and entertainment.
New rental developments are in progress to address burgeoning demand, but they are unlikely to get ahead of the curve and abate pressure on rents. Multi-family properties will remain attractive to Boston Metro area investors for years to come.
If you are planning to begin, expand or relocate your business, or you are seeking commercial investment opportunities, we have the resources and experience to help you! We provide complete location search assistance and square footage cost analyses.
Contact us today to learn more about the excellent options that are available for property leases and purchases!
Jay Nuss Realty Group, LLC
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