Rents Decline, Concessions Grow As College Move-In Day Arrives And 13,000 Greater Boston Units Sit Empty
Sept. 1 is the traditional move-in day for fall classes and when landlords expect their market’s lull to come to an end. But this is 2020.
With some of the 52 Greater Boston colleges and universities’ fall class plans involving only remote learning or still in flux, the apartment market has softened for the first time in years.
Year-over-year rents are down 3% and concessions are on the rise as 13,000 of the market’s approximately 250,000 rental units remain available for rent, according to data compiled by the Boston Globe.
Zumper data shows an 8% drop in year-over-year one-bedroom rent.
"We have a whole new situation now," Zillow economist Joshua Clark told WBUR. "The city of Boston and the metro area is usually getting ready right now for a flood of students to come on down to town and take up a huge amount of the demand and need a lot of supply that we see around the city."
In Boston proper, average rents dropped by $14 for a two-bedroom apartment between July and August, according to Apartment List’s latest rent report. The decline has been happening all summer: Apartment List’s data shows average two-bedroom rent has plummeted $44 since April.
Boston rent growth has fallen much more steeply than the national average, and its decline is more precipitous than the rest of the commonwealth. Clark said the price declines are the first since Zillow began tracking the Boston multifamily market in 2014.
Meanwhile, serious concessions are being offered to attract tenants. The Smith in the South End and Bower in Fenway, two new luxury apartment buildings, are offering two months’ rent on certain apartments, in addition to their rooftop decks, fire pits and pet spas.
More residential inventory is about to hit the market. In July, 100 projects that will deliver nearly 21,000 new units were underway, and a further 56,000 units were in the planning and permitting stages. That could mean owners have not seen rents hit rock bottom yet.
“A lot of these apartments have never been vacant on Sept. 1,” Places For Less Chief Operating Officer John Puma told the Globe. “Once it sets in that there’s all this vacancy, I don’t know what the limit will be on price reductions.”