Limited Stock Expansion Keeps Occupancy High
Boston’s multifamily market showed the first signs of recovery at the start of 2021’s second quarter and maintained a steady pace throughout the year. Mirroring the national trend, rent growth softened with the arrival of the winter season, and posted a 0.7% increase on a trailing three-month basis through December, 10 basis points above the U.S. rate. The average rent in the metro clocked in at $2,514, well above the $1,594 national figure. The occupancy rate in stabilized properties climbed 150 basis points in the 12 months ending in November, to 96.5%, led by robust demand for Lifestyle apartments.
Boston unemployment dropped to 4.3% in November 2021, almost on par with the U.S. rate. Hiring picked up pace, and the metro added 166,400 jobs in the 12 months ending in October, for a 7.3% expansion. Even though leisure and hospitality led gains (51,100 jobs), a surge in infections might stand as proof of a tough year ahead. One of the bright spots Boston’s local economy is its biotech sector, which has experienced substantial growth in recent years.
Developers delivered just 5,259 units in 2021, marking one of the slowest years in a decade, with an additional 7,911 units underway at the start of 2022. Transactions, on the other hand, marked a new high, totaling $3.2 billion. The price per unit also rose considerably, surpassing the $400,000 mark.
Read the full Matrix Multifamily Boston Report-February 2022