Somerville 2021 Apartment Rental Market Report

Like most of Boston metro’s core neighborhoods, Somerville’s apartment rental market has been on a roller coaster ride since COVID began. Last year in October, when campuses were empty and professionals left the rental market in droves, we reported on the 247% increase in the vacancy rate for Somerville apartments compared to October 2019. We’re happy to report that figure has come back down to Earth, settling close to its pre pandemic level. However, the most recent rental data in Somerville suggests that shifts in renter demand towards the city may be slowing Somerville’s recovery from the pandemic.

Somerville Apartment Supply YOY vs. Pre-COVID

Somerville’s current apartment real-time vacancy rate (RTVR) is 1.32%, while its real-time availability rate (RTAR) is 1.97%. That may sound great at face value because it is, especially when you consider that these figures have dropped by -59.55% and -65.71% respectively since December 2020. However, when you compare Somerville’s current apartment supply to December 2019, before the pandemic, it paints a different picture.

Somerville’s apartment RTAR is up +53.91% since December 2019. That is the 3rd largest increase in RTAR out of the 32 neighborhoods closest to Boston behind only Revere (+105.45%) and Lower Allston (+211.76%). The vacancy rate in Somerville is also +28.15% higher than it was 2 years ago, the 6th largest increase in RTVR.

Medford, Cambridge, Jamaica Plain, and Dorchester have all recorded similar increases in apartment supply and vacancy numbers compared to their pre-COVID levels. For contrast, the 4 neighborhoods that have seen the biggest decrease in RTVR compared to December 2019 are Mission Hill (-97.74%), Fenway (-88.51%), Back Bay (-84.78%), and South End (-70.00%).

So from this data it would seem demand has moved away from some of the outer areas and shifted towards Boston’s core over the past 2 years. This effect can be seen clearly in Somerville, and further evidence of this trend is illustrated when you calculate the 2 year change in apartment supply for the city of Boston compared to the suburbs.

This seems like a complete reversal from what we were seeing throughout most of the pandemic. Up until September of this year, when campuses reopened and professionals returned, most of Boston’s surrounding markets were seeing much less apartment supply upheaval than the city’s core rental markets. Somerville in particular maintained a lower RTVR and RTAR than the city of Boston by a considerable margin through most of 2020 and 2021. That all changed in August when the pandemic appeared to be waning, and Somerville’s supply numbers have not caught up since.

Average Rent Prices in Somerville

Perhaps as a result of the slower recovery, average rent prices are down in Somerville at a larger margin than that of Greater Boston compared to before the pandemic. There could also be the real possibility that the densely clustered technology related jobs that surround Somerville have allowed for remote workers to prove their case that they do not need to come to work much, if at all. Some local experts have theorized that the huge amount of “techies” that lived in Somerville have moved further away and may not come back anytime soon. Average rent in Somerville is currently $2,459, down -3.23% compared to December 2019 and up slightly (+1.78%) since last December. Average rent for Boston apartments currently sits at $2,532 for comparison, and has dropped by a smaller margin over 2 years (-1.97%). Somerville has the 13th highest average rent price out of the 33 neighborhoods closest to Metro Boston, and the 3rd highest average rent price outside of Boston proper.

Rents have dropped more for smaller apartments in Somerville than for larger units. Average rent price in Somerville for studios, 1 bedrooms and 2 bedrooms have dropped -6.77%, -3.15%, and -4.96% respectively over the past 2 years, while average rent prices for 3 and 4 bedrooms have only slipped -1.84% and -0.21% respectively over the same time span.

Somerville’s Apartment Rental Market Outlook for 2022

Somerville’s overall market health looks strong moving into 2022. Regardless of demand trends and where they shift, the current vacancy rate of 1.32% is nothing to sob about, and would be considered great even in a perfect economy. Notwithstanding any major calamity or massive increase in other variants of the pandemic, look for the apartment supply to continue to shrink in 2022 in Somerville, eventually pushing prices back to their pre-pandemic levels and possibly even higher. We will continue to monitor these trends as the develop.

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