Boston Rental Market Trends in 2023
To say it’s been a turbulent few years for Boston’s rental market would be an understatement. In late 2019, we were experiencing the strongest rental market the city has ever seen with record high rents and unprecedented low inventory. We saw that strong apartment market get eviscerated in 2020 due to COVID. Our city witnessed a flight to the suburbs and the rise of remote learning and remote work. We then experienced an unprecedented market resurgence in the middle of 2021 that led us to our current apartment shortage and subsequent record high rents. Words can’t encompass the massive shifts in housing patterns we have been through over the past several years. The question on the minds of everyone that cares about real estate is “where do we go from here?” What is the real time data suggesting? What national or local forces could impact the direction of our rental market?
Here are the main trends in 2023 that will affect Boston’s apartment rental market.
1. Boston’s Apartment Rental Supply (or lack thereof)
Arguably the greatest obstacle the Boston rental market faces moving forward is the apartment supply shortage. Lack of supply due to a myriad of local factors is the main catalyst that’s driving up the average rent price in Boston. With the real time availability rate (RTAR) and real time vacancy rate (RTVR) at record lows there appears to be no quick or easy solution in sight. Even more concerning is the fact that Boston’s Planning and Development Association (BDPA) recently released their numbers for new housing units approved in 2022, and they are down -44% from 2021 and -68% from 2020.
When you consider that it often takes 2-3 years for proposed projects to get through our permitting and construction process, this does not bode well for the housing supply shortage over the next few years. The BDPA touts that in 2022 the city approved the highest percentage of income-restricted…