2023 Back Bay Apartment Rental Market Report
Record high rent prices and record low inventory is the trend for Boston’s most expensive apartment rental market, Back Bay. Average rent price for Back Bay apartments is currently at a record high of $3,998 and will pass the $4,000 soon. Real-time availability rate (RTAR) peaked at 2.61% in early April, marking the second consecutive year that apartment availability failed to surpass 3% at the seasonal peak. In years past, that figure would typically peak well above 4%, but now the market is tighter than ever. Here are the trends driving Back Bay’s apartment rental market.
Unprecedented Rental Supply Shortage in Back Bay
The current real-time availability rate (RTAR) in Back Bay is 1.71%. That figure is down -3.93% year-over-year and down -57.99% from its pre-pandemic level in May 2019 (4.07%). Back Bay’s RTAR hit an all-time low in October of last year when it bottomed out at 0.18%.
The current real-time vacancy rate (RTVR) in Back Bay is 0.31%. Back Bay’s vacancy rate has remained below the 0.5% mark since January of 2022. Last September, the RTVR did not spike at all like it had in the years prior to COVID. This illustrates that Back Bay is not exhibiting the same seasonal turnover it has in past years, likely due to the fact that student renters have been priced out of the area.
Back Bay Average Rent Higher Than Ever
The average rent price in Back Bay is $3,998, up +10.23% from a year ago. Back Bay remains the most expensive neighborhood to rent an apartment in Boston by a full $229 over Downtown ($3,769). It’s also $964 more expensive than the average rent of Boston apartments ($3,034).
This trend has been prevalent all across the metro region this year. As rent prices decline nationwide, they are still on the rise in Boston due to the complete lack of inventory. There is no end in sight for the current supply shortage, which means it is hard to see any scenario where rent prices turn downwards in Back Bay or elsewhere in Boston.
Back Bay Apartment Rental Market Forecast 2023
Based on current local economic factors, Back Bay’s average rent price will continue to climb throughout the remainder of 2023. Price growth may decelerate towards the end of the year, but prices are unlikely to turn downwards barring an economic collapse in Boston’s local economy. For now, local unemployment is low and housing demand remains high, which will continue to fuel rental price growth.
It appears that Back Bay is moving away from the seasonal turnover that is prevalent in many of Boston’s student neighborhoods. Both RTAR and RTVR have flattened out in the past two years compared to the years prior to the pandemic. Back Bay’s rising rent prices have likely diminished demand from Boston’s student population. This could be a trend to look out for in the months and years to come.