2023 Fenway Apartment Rental Market Report

The apartment rental market in Fenway is experiencing the same apartment scarcity it did in 2022. However, now in 2023, rent prices for Fenway apartments are on average +12.30% higher than they were a year ago. The current average rent price in Fenway is at an all-time high and showing no signs of going down on account of the historic apartment shortage the city is facing. With the lack of new, innovative housing supply options coming from elected officials in the general Fenway area– the chances of apartment prices going down do not look promising.

Fenway Apartment Supply Metrics

The vacancy rate for apartments in Fenway currently sits at 0.14%. Fenway’s real-time vacancy rate (RTVR) has been hovering close to zero for most of the past 14 months and has not gone above 1% since October 2021. These record-low vacancy rates are a recent phenomenon that clearly proves that focusing on supply-side solutions and relaxing zoning requirements to allow for increased density is the best course of action. Allowing height increases in building sizes would also help provide more housing as Boston has very little available land left in the area.

The real-time availability rate (RTAR) for Fenway apartments is 5.88%, which is slightly higher to where it sat during mid-February 2021 (5.15%).  Fenway’s historical rental data shows that apartment turnover has decreased over the past 2 years compared to the years prior to the pandemic.  RTAR typically would peak at 12-15% in Fenway during springs prior to 2020, but last year Fenway apartment availability did not exceed 9% at the season’s peak.  The lower turnover rate is due in part to what we have coined as “renters fatigue” due to the massive amount of people that moved out and back into the city in a rapid manner due to the effects of the pandemic.

Both RTAR and RTVR hit all-time lows last year and could do so again in 2023. These figures both illustrate the supply shortage that renters are facing in Fenway, and the subsequent rent hikes that come with them. There can be no doubt that the pandemic and all its associated problems wreaked havoc on the delivery of new supply. What Boston desperately needs is innovative thinking on how to get additional supply going as quickly as possible.

Fenway Average Rent Prices

The current average rent price in Fenway is $3,342. That figure is up +12.30% since last February and is continuing to rise in recent weeks. Rent prices rose sharply for smaller studio and 1 bedroom units, both increasing +17.41% and +17.96% respectively year-over-year.

Fenway Rental Market Forecast 2023

The Fenway rental market is showing no signs of slowing down so far in 2023. With RTVR and RTAR both well below historical levels, it’s hard to see a way out from rising rents even in a slow and mismanaged economy. Fenway will always be a neighborhood where rental demand is high due to its close proximity to local universities and medical facilities.

Fenway is in desperate need of additional housing units to meet this growing demand, but it lacks the availability of developable land to do so. The city will have to figure out a way to make it easier for landlords to add additional bedrooms and units to their existing properties in Fenway to make the most out of the current housing stock that is there. The city needs to provide incentives to property owners to develop more market rate housing so that they quickly start building which could help alleviate the short supply. Many of the current apartment developments are not moving forward because the deals will not pencil due to the huge amount of affordable housing requirements. Right now we are in a tough situation due to our incredibly high construction, energy and material costs. Builders are disproportionally hurt when energy prices are high as well as runaway inflation. This raises the cost of the finished product so by asking for more affordable units out of a developer causes the deal not to make financial sense so we end up with less housing.

Without focusing on delivering a massive amount of new supply without onerous restrictions, it will be difficult for Fenway to curb rising rent prices. Rent prices could turn downwards in Fenway if we see a wave of corporate layoffs like we did in the last recession. For now, Boston’s unemployment rate remains low despite the sluggish national economy, indicating that rent prices are unlikely to come down anytime soon. We will continue to track these market trends as they develop.