Rent Growth Rebounds in Boston

The metro’s multifamily development pipeline remains steady, yet demand is once again outpacing supply. Monthly rates rose 2.9 percent year-over-year.
Boston rent evolution, click to enlarge

The Boston multifamily market remains stable, having posted a strong rental season. Monthly rates rose 2.9 percent year-over-year through July, and despite the metro’s strong and steady pipeline, demand is once again outpacing supply.

Professional and business services led growth, having generated 22,400 positions. Boston’s renowned academic institutions, health-care providers and high-tech research and financial companies fortify the metro’s status as an East Coast economic anchor, generating high-paying jobs at a rapid pace. This, in turn, is maintaining upscale housing demand elevated. The construction sector is also thriving, thanks to a steady stream of developments underway. The list includes the 45-acre Cambridge Crossing, which upon completion is set to add 2.1 million square feet of science and technology space, 200,000 square feet of retail and roughly 2,400 new residential units.

Transaction activity softened, with $654 million in multifamily assets trading in the first half of 2018. Even so, values remain high, as the per-unit price reached $363,641 this year through July. With nearly 16,500 units under construction and roughly 4,900 units anticipated to come online for the whole of 2018, we expect rents to rise 2.8 percent in Boston this year.

Read the full Yardi Matrix report.