Looking back over the last two years, few Boston neighborhoods saw as much supply upheaval as did the North End. As apartment availability hit unprecedented levels all over the city in March 2021, only 4 Boston neighborhoods recorded a higher real-time availability rate (RTAR) during that time: Fenway, Allston, Mission Hill and Downtown.
What happened next must qualify as one of the fastest and most drastic market corrections in history. North End’s RTAR hit a new all-time low by October of last year, and now the area is experiencing historically low apartment availability. As a result, average rent prices in the North End have recently surpassed previous all-time highs set before the pandemic.
Record Supply Absorption in North End Boston
In March of 2021, the RTAR of North End apartments skyrocketed to an all-time high of 17.32%. By October of 2021, just 6 months later, North End’s RTAR plummeted to a new all-time low of 2.00%. Now, the RTAR in the North End is 3.49%. The current RTAR is 40.64% below its pre-pandemic level of 5.88% in May 2019, indicating that renters are seeing a significant decrease in available apartments in the North End coming out of the pandemic.
A look at the real-time vacancy rate (RTVR) in the North End reveals a similar trend. The most recent apartment data for the North End is showing an RTVR of 0.31%, which is slightly below the May 2019 RTVR (0.34%). This suggests that apartment occupancy in the North End could potentially reach 100% when it hits its 2022 cyclical low in late August. If it does, it would break the previous all-time low RTVR set in the North End in late August 2019 (0.09%).
As a result of the record low supply of available apartments, average rent prices in the North End have bounced back after declining throughout most of the pandemic.
Record High Average Rent Prices in North End
The current average rent price in the North End is $3,135, making it the 6th most expensive neighborhood to rent an apartment in Boston ahead of Beacon Hill ($3,052) and behind Fenway ($3,144). As of the beginning of this month, North End’s average rent price surpassed its previous all-time high set in late March 2020 ($3,117).
The current average rent price is up +7.94% year-over-year in the North End. This followed an 18 month period where rent declined in the North End by as much as -7.53% year-over-year.
2022 North End Market Predictions
Given the current shortage in apartment inventory, look for rent price increases to accelerate in the North End throughout all of 2022. We could potentially see a 8-12% year-over-year lift in average rent price by the end of the year. That would put that figure north of $3,300. Renters who act early in 2022 will see the best pricing in the North End in addition to the most inventory. Those who put off making a decision until August and later will see higher prices and very few options. We could certainly use more real estate development in the North End. Regardless of apartments or condominiums, Boston can easily absorb everything that we build or renovate in the North End. Our local lawmakers should be strongly considering any legislation or permitting that quickly increases supply.
We expect demand for summer leases to pick up in Boston’s downtown neighborhoods in 2022 as remote workers make their way back to the office. This will put additional demand pressure on the already tight supply of apartments in the North End and Downtown neighborhoods. It will be interesting to see if apartment occupancy does reach 100% in the North End this year, which it appears it likely could based on the current trend in RTVR. Quite frankly, it may be easier to find a clear picture of Bigfoot than a habitable vacant apartment in the North End if this shortage goes on and high demand runs unabated. We will continue to monitor these real estate data trends as they develop.
Published May 31, 2022
Demetrios has pulled together the largest apartment leasing team in the Greater Boston Area and is responsible for procuring more apartment rentals than anyone in New England – with over 130k people finding their housing through his services. Demetrios is an avid real estate developer, peak performance trainer, educator, guest lecturer and motivational speaker.