South Boston Apartment Rental Market Report 2020
The South Boston apartment rental market has long been one of the most competitive areas to find an apartment when compared to all other neighborhoods in the Greater Boston area. It consistently maintains a low vacancy rate and it experiences an even lower apartment turnover rate than nearly all parts of Greater Boston. When South Boston apartments come to market, they are quickly rented, and many astute real estate agents develop long lead times on getting the jump on an upcoming availability.
The pandemic has caused much upheaval in the Greater Boston housing market, and vacancy rates have soared to levels not seen in decades. While the South Boston apartment rental market has seen an increase in supply, it is no where near the record high vacancy rates we’re seeing in the city or even in the suburbs. South Boston seems to be bucking the trend of significantly higher apartments vacancy rates.
Real Time Apartment Vacancy Rates in South Boston in 2020
The Real Time Vacancy Rate (RTVR) in South Boston is currently 2.74%. That marks a 114.06% increase from last November’s (RTVR) of 1.28%, which sounds like a lot until it’s put into context. The current vacancy rate of 2.74% is the 5th lowest out of 26 neighborhoods in Boston. Its increase of 114.06% from 2019 is also the 6th lowest percentage change year over year among all neighborhoods in Boston. It’s safe to assume that a 2-3% vacancy rate is a normal and acceptable figure for any neighborhood, and many other cities across the country would be hard pressed to see percentages that low prior to the pandemic. So in some respects, the RTVR is actually a healthy number because it gives consumers more choices and keeps rental prices from accelerating upwards.
|Town Neighborhood||2020 Vacancy Rate||2019 Vacancy Rate||% Change|
|City of Boston||7.21%||1.36%||+423.53%|
When you consider the fact that the vacancy rate of the City of Boston is currently at 7.12%, a 423.53% increase since November 2019, you can see that that things aren’t all that bad in the South Boston rental market. The suburbs haven’t seen nearly as much of an increase in vacancies as the City of Boston due to the pandemic, and even some towns outside of Boston have seen a bigger year over year increase in vacant inventory compared to South Boston. The vacancy rate of all suburbs combined is currently 4.44%, which is a 228% increase year over year. South Boston simply remains a highly sought after apartment location.
So even as residents are fleeing the densely populated urban centers and spreading out towards the suburbs, it’s still more difficult to find an apartment in South Boston than it is the suburbs (by almost double). The only other neighborhoods within the city of Boston that has a lower vacancy rate currently are Roslindale, West Roxbury, and Hyde Park, which are all situated away from the populous Downtown area. This reflects an overall national trend that is occurring due to COVID-19 where the population is spreading out away from urban centers towards more sparsely populated areas. Charlestown also has a very low RTVR and many consider apartments in Charlestown to be spread out and more open because of the access to the water.
While a 114% increase in vacancy rate is certainly not something to celebrate, the price reductions that typically come with increase supply certainly are. Surprisingly thus far, despite such a huge increase in vacancy rates in the City of Boston as a whole, prices haven’t come down all that much. Rent prices in Boston fell by an average of 1.75% across all size units since November 2019, however in South Boston rent prices have dropped by 3.7% year over year. That being said, we are talking about a huge number of apartments across Boston, so it takes a while for overall average prices to drop down in a significant manner. However, what we have been seeing in droves is a massive amount of concessions on move in costs. We have been witnessing a lot of landlords throwing in one month’s free and/or paying the brokers fee. So, while you may not see the average moving very fast, the concessions are making for great deals. That and we do see apartments rent quickly once a landlord decides to drop the price. It’s ok to negotiate to try to get a great apartment in South Boston, but don’t expect to get tremendous discount compared to other parts of Boston.
Average Rent Prices in South Boston
South Boston still remains among the top half of all neighborhoods in terms of rent prices despite the larger price drop in comparison to other areas. It ranks 10th highest in terms of average rent price out of 26 neighborhoods in Boston, and is comparable to the rent prices found in Charlestown. Both areas have strong rental markets but South Boston apartments rent in fewer days than Charlestown all things being equal.
|Neighborhood||Studio Avg. Rent||1 Bedroom Avg. Rent||2 Bedroom Avg. Rent||3 Bedroom Avg. Rent||4 Bedroom Avg. Rent||5 Bedroom Avg. Rent|
|City of Boston||$1,743||$2,090||$2,536||$3,981||$3,555||$4,259|
Renting a larger size apartment in Southie can be particularly expensive. South Boston has the 2nd highest average rent price for 5 bedroom apartments and the 5th largest average for 4 bedroom apartments. For renters looking for a better deal, smaller size apartments like Studios and 1 bedrooms typically tend to be closer to the City average. 2 bedrooms and 3 bedroom apartments in South Boston are on average 20-25% higher than the average for the City as a whole. Overall, some of the newer 4 bedroom and 5 bedroom apartments in South Boston can be breathtakingly awesome, and the prices reflect the: size, layout, amenities and condition accordingly.
Looking Towards the 2021 Rental Market in South Boston
While we expect further price reductions to continue for other areas of the city, we expect the South Boston apartment rental market to be mostly insulated from this trend. Landlords have been finding different ways to incentivize South Boston renters to lease without dropping prices. We’ve seen a couple of landlords paying as much as 2 months’ rent and waiving deposit fees in order to fill units, which has been effective. However, these types of big incentives are far from the norm. South Boston rentals are going to stay strong for a number of reasons. South Boston has always been insulated from the cyclical trend of high apartment turnover from the student population. Tenants are willing to ride out the pandemic living in South Boston because they don’t want to give up their hard earned apartment. For many apartment seekers, it was a total pain and stressful endeavor to land a great place in Southie, so staying put is what we are seeing with a lot of renters. For this reason, we predict rentals in South Boston will remain solid and we will not be seeing huge incentives or price drops as the norm like we are witnessing in many other parts of Boston. As always, we will continue to monitor the situation closely and provide updates accordingly.