There is some early data that could be suggesting that prices of smaller units may hit a ceiling and that demand has leveled off at current pricing. Boston renters appear to be gravitating towards shared spaces where they can reduce their overall living costs as opposed to renting a smaller unit for a higher price. This could be an early indicator of overall rent prices possibly flattening out in the latter half of 2024. Property owners tend to put out their smaller units for rent later in the leasing season because they require less people to make a decision. It will be interesting to see what type of data points start to gain traction as we approach the middle of April.
Average Time on Market for Boston Apartments Up
Our most recent Boston apartment data shows that the current median days on market for an apartment rental is 17 days. That is down 4 days when compared to early February 2023, when average days on market hovered between 21 and 23 days. This reduction highlights the ongoing strong demand for apartments, with supply not meeting this demand adequately. If the median days on market rises above 20 days, coupled with an increase in the RTAR, then we could seriously entertain the possibility of rent prices beginning to soften in Boston.
Frequently, a minor price reduction is sufficient to lease a unit that has been on the market longer than the area’s median days on market.
Boston Apartment Rental Market Trends in 2024
The predominant trend in Boston’s rental market is still supply scarcity. Anything acting as a lever to housing supply will be under a microscope this year as the city is in dire need of additional rental inventory to ease soaring prices. Here are some of the main trends that could affect supply and pricing in 2024.
1. Boston’s Construction Boom Has Stalled Out In Recent Years
In our 2023 Boston Apartment Rental Market Report, we reported on a lackluster 2022 in terms of new housing development in Boston. Based on available…