2023 South Boston Apartment Rental Market Report
The apartment rental market in South Boston has historically been one of the most consistent and least volatile rental markets in the metro area. Whereas most neighborhoods exhibit clear seasonal swings in both apartment availability and vacancy, Southie’s apartment supply stays steady and scarce throughout the year comparatively. That still seems to be the case in South Boston, even as apartment supply is drying up all over Boston.
South Boston Apartment Supply Still Scarce
The current real-time availability rate (RTAR) for South Boston apartments is 2.23%. That is exactly the same as the vacancy rate from 1 year ago, further solidifying Southie as one of Boston’s most consistent rental markets. A look at the historical RTAR in Southie shows that it’s on almost an identical trend as it was last year.
South Boston’s real-time vacancy rate (RTVR) is currently at 0.62%, which is down -34.04% since last year. Southie’s vacancy rate has stayed above the RTVR of Boston apartments for most of the past 12 months. This is an interesting departure from the norm. In years past the vacancy rate in South Boston was always below that of Boston by a significant margin. However, this is more a function of vacancies decreasing by larger margins in other neighborhoods rather than RTVR increasing in South Boston. Overall, South Boston is still one of the most sought after apartment leasing areas in Massachusetts.
The most recent South Boston rental data is showing that apartment inventory is low as usual. Interestingly, South Boston’s RTAR and RTVR did not hit all-time lows last year in 2022 like they did in most metro neighborhoods. Despite the relative stable rental supply, rent prices are still climbing in Southie. Property owners have been forced to absorb higher operating costs due to runaway inflation that hit the labor and materials market.
South Boston Rent Prices Still Above Average
The current average rent price for an apartment in South Boston is $3,312. That figure is up +10.45% year-over-year. Last February, average rent in Southie broke its previous all-time high from May 2020, and has since continued to rise amidst low supply and high demand. Earlier this month, South Boston again hit an all-time high in average rent price at $3,315.
South Boston Rental Market Forecast 2023
Based on the current apartment inventory in South Boston and elsewhere in the metro area, it’s hard to see a path where rent prices go down in 2023. Despite a sluggish economy, rampant inflation, and poor energy policy from the current administration, demand for South Boston apartments has yet to show signs of slowing. Perhaps a tenth rate hike might be all it takes, but it is too early to tell. The various bank meltdowns we witnessed over the past couple weeks has made it difficult to feel like we are sitting on firm economic ground.
Overall, we do not expect prices to trend downwards in South Boston over the next few months. It’s a tough call to say we are 100 percent certain in our forecasting with all the noise in the equation lately. With interest rates rising, it may even push more people towards renting, which could put more pressure on the already limited supply of apartments in Boston. Look for rent prices to most likely continue to slowly rise in 2023 in South Boston, albeit at a much lower margin than the past year. There could be storm clouds in our economic landscape that could change this forecast rather quickly.
If the struggling national economy begins to affect our local economy in Boston, that could alter our outlook considerably for the second half of 2023. We keep hearing rumors of large corporate layoffs looming here in Boston. If our various tech, medical and finance sectors start to tank we could see rent prices trend downwards quite quickly. South Boston is heavily weighted with professionals in all facets of our faster growing and highly paid industries. For now, we are not seeing a lot of lease breaks in South Boston due to job loss, but it could be a potential long-term threat if we can’t get the economy to function at optimal levels. We will continue to monitor these trends as they develop.