The challenges faced by the Boston housing market have been well documented in 2020. The pandemic has caused massive shifts in urban population distribution in metropolitan areas all across the country, and Boston is no exception. It effectively took one of the nation’s hottest real estate markets and caused it to come to a grinding halt as apartment vacancies soar all over the city.
What’s particularly interesting in Boston’s case is which neighborhoods have been affected the most. When looking at the data trends for year over year inventory growth, we're seeing vacancy numbers that we've never seen before in certain areas. The availability rate equals all current vacant apartments plus those becoming available, divided by the total number of apartments.
The 6 Boston neighborhoods that have seen the biggest increase in year over year apartment availability are:
11/2020 Availability Rate: 18.56%
11/2019 Availability Rate: 1.26%
YOY % Change: +1373.02
2. Beacon Hill
11/2020 Availability Rate: 7.08%
11/2019 Availability Rate: 0.66%
YOY % Change: +972.73%
11/2020 Availability Rate: 12.04%
11/2019 Availability Rate: 1.34%
YOY % Change: +798.51%
11/2020 Availability Rate: 15.92%
11/2019 Availability Rate: 2.65%
YOY % Change: +500.75%
11/2020 Availability Rate: 11.3%
11/2019 Availability Rate: 2.02%
YOY % Change: +459.41%
6. Back Bay
11/2020 Availability Rate: 7.28%
11/2019 Availability Rate: 1.42%
YOY % Change: +412.68%
One fact is obvious when you look at this list: the areas closest to Downtown are seeing the biggest year over year change in apartment supply. This change is reflective of a broader national trend of people moving out of the densely populated urban areas towards the suburbs. Cities like New York, San Francisco, and Los Angeles have all seen a considerably decrease in population growth throughout much of 2020.
Also, this list is showing that the neighborhoods located closest to the city’s largest Universities are seeing huge spikes in year over year vacancies. Boston’s rental market is largely dependent on the student population. In fact, over 60% of leases in Boston begin on 9/1, as this date coincides with the beginning of the fall semester. Most of the areas Universities are offering remote learning for the fall semester or some hybrid model. This has had a drastic impact on the local housing market, as neighborhoods like Symphony, Fenway and Allston are soaring apartment vacancies.
For now, apartment pricing hasn’t been affected as drastically as the availability rate. Prices are down only 1-3% citywide despite a large increase in supply. If inventory continues to hang around, look for prices to fall quickly at the beginning of January. Boston Pads will continue to monitor the situation as it develops.