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Boston rent returns to pre-pandemic rates after record low year

Boston rent price increase
A row of houses on St. Mary’s Street. The Boston and Greater Boston Area rental prices have increased, returning to pre-pandemic rates, due to a decrease in the supply of apartments available. ALICE LEE/DFP STAFF

Rental prices in Boston have returned to pre-pandemic rates after an influx of people returned to the city following a year of remote work and learning, according to a study conducted by apartment rental agency, Boston Pads. 

According to the 2022 Boston Apartment Rental Market report, the average price for a two-bedroom apartment declined from its peak of $2,632 in June 2020 to a low of $2,532 in October 2021. However, prices have gradually increased since and as of Jan. 2022, the average price of a two-bedroom sits at $2,537, the report said.

Demetrios Salpoglou, CEO of Boston Pads, said companies with investments from private equity firms, so-called venture capital companies, have influenced rental prices.

“So when you have high incomes, developers will spend more on buildings, and they need to recoup those costs because they’ve added more goods and services and smart technologies and they’re morphing forward,” he said. 

Emma Murphy, a sophomore in the College of General Studies, said she searched “extensively” since November for an apartment with a Sept. 1 move-in date.

She added some of the best two-bedroom apartments she toured were around $2,300, which she considered “expensive for students.” 

“I think if you can’t work a full-time job like that’s almost impossible. You’d have to work at least two jobs over the summer to even come close to making it rent for the whole year,” she said. 

Zach Parker, marketing manager for Boston Pads, said he suggests renters “lockdown an apartment” as soon as possible.  

“We’ll probably continue to see prices go up throughout the whole year, which is going to be kind of a diversion from the historical trend,” he said. 

Parker said the demographics of people renting in Boston is largely split between college students and young professionals. 

Salpoglou said rental inventory— the number of available apartments— usually increases in April of each year and is quickly absorbed by Sept. 1 before the start of the fall semester for most universities.  

“We never saw anything like this,” Salpoglu said. “We just saw so many apartments getting rented so fast. It was incredible.”

Salpoglou said the low supply of available apartments also causes the increase in rental prices. 

“We’re never creating enough housing to keep up with population growth,” Salpoglou said. “It’s going to be an ongoing challenge.” 

The real-time availability rate — the percentage of apartment units available now and in the future — of rental units was as low as 2.88% on Jan. 26, according to the Boston Pads report. 

Mickey Liu, a sophomore at Berklee College of Music, said he lives in an apartment in the Back Bay area with two other roommates. 

“Compared to other apartments in Boston, I would say the one I’m in now is not cheap, but not expensive. Just like right in the middle,” Liu said. 

He added that his apartment building includes a concierge, gym and swimming pool and his individual rent is slightly higher than $1,000 a month. 

“I think Boston is top five or even top three for living costs. Just maybe a little bit cheaper than New York. And I guess because there are a lot of colleges and people want to get college students’, like international students’, money,” Liu said. 

Chris Salviati, a senior housing economist at Apartment List — an apartment-hunting site — said remote and hybrid work policies have also caused rental prices in Boston suburbs to increase at a faster rate than in the City.

“I think those are some of the places where we’re starting to see stronger demand now as folks are a little bit less worried about you having that slightly longer commute if they’re only doing it a couple days a week,” Salviati said.

Salviati also explained how rental demand in big cities like Boston might decrease due to the ubiquity of remote work.

“I do think that we’re now entering a phase where a lot of this remote work stuff is set to outlast the pandemic,” Salviati said. “I think going forward, even when we are no longer worrying about COVID, we will now be in a place where a lot of folks are making those housing choices a bit more independently of where their job is located.”

 

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