Widely known for its historical American Revolutionary-era sites, passionate sports fans, and prestigious universities, the Greater Boston area is the heart and soul of New England. With Cambridge rated the No.1 Best City to Live in America, it’s no wonder why the metro’s apartment market is trending positively.
According to Berkadia’s Forecast Report, average occupancy across the market is projected to increase 40 basis points annually by the end of 2024, the largest increase in the Northeast. Meanwhile, average effective rent is expected to increase 3.3 percent annually, which is on par with Newark for the most growth in the region, despite rent costing nearly 31 percent of the average renter’s income.
These strong apartment fundamentals are underpinned by Boston’s economy spurring demand from young professionals. With 64 colleges and universities in the metro area producing over 300,000 students, Boston boasts the fifth strongest job market of the 150 most populous metro areas in the nation and was ranked No. 12 Best City for Young Professionals, the top city in the Northeast. Additionally, local Bostonian employers added 77,900 net jobs to payrolls from December 2022 to December 2023.
Leasing activity is forecast to increase for the second consecutive year across Boston, with roughly 9,700 net units set to be absorbed. Specifically, the Fenway/Brookline/Brighton submarket is expected to have the most rental traction compared to other submarkets. Net absorption is projected to jump to roughly 2,200 net move-ins by the end of 2024 from 600 net move-outs from the previous year.
The resurging popularity can be contributed to the area’s appealing urban amenities, all conveniently located within a few city blocks. The submarket is home to major universities, Boston University and Northeastern University; large medical employers, Boston Children’s Hospital, BU Medical Campus, and Beth Israel Deaconess Medical Center; and lively entertainment options, such as Fenway Park and Boston’s Museum of Fine Art. In July 2023, the Boston Planning and Development Agency board approved a $1.6 billion mixed-use project, Fenway Corners, which will include bring offices, labs, apartments, retail space, and five acres of public space, including a pedestrian plaza.
To learn more about the Boston market, reach out to one of our trusted advisors in Boston.
To access our Q4 2023 Construction Pipeline Quarterly Reports, download the report today.