Boston Multifamily Inventory Spikes, And It May Only Get Worse
Multifamily rental inventory has tripled in some places in Boston, a sign that many renters have left their homes over the first two months of the coronavirus pandemic.
Across greater Boston, apartment inventory is up 58% from 2019, according to Multiple Listing Service Property Information Network data pulled by real estate agent David Bates and published in Bates' newsletter. Back Bay’s inventory nearly tripled, rising from 102 available units to 290, while the South End and Beacon Hill’s inventories more than doubled.
While the Boston multifamily market may be poised for a relatively quick recovery, it may get worse before it gets better. Landlords are doing what they can to retain existing tenants, including keeping rents the same or even lowering them, but some of the units that are available may not even be listed yet.
“Several landlords have told us they are holding off giving out their inventory because they believe pricing may be better in late May or June,” Boston Pads CEO Demetrios Salpoglou wrote earlier this month. “Some landlords are even avoiding contacting their tenants about renewals until mid-May to see what transpires in the market."
Bates wrote that a “sizable Boston landlord texted me that he was experiencing ‘lots of lease breaks,’” and that may be one reason that apartment listings between April 20 and May 20 are up from 1,417 to 1,859, a 31% increase.
Bates points to several other reasons for the increased inventory, including the inability to physically show apartments.
“It's also almost impossible for hard-charging tenants determined to rent by the end of the day to go look at several options and make a decision,” he wrote. “So, such obstacles are likely slowing the ability of the majority of motivated renters to find their perfect pad.”
Further muddying the multifamily waters in the Boston area is the future of its typically reliable renter base of college students. Rent growth is seasonal, and Boston’s is most robust in the late summer, when students begin leasing for the fall semester, according to a report from Zillow. With the fall semester an uncertainty for many colleges, landlords may not see the bump they expect at the end of the summer.