The apartment rental market in Back Bay Boston appears to be shifting slightly towards the renter in 2024. Apartment availability has more than doubled compared to late July 2023, while apartment price growth has leveled off in recent months. In Boston’s most expensive rental market, we are starting to witness price-reduced apartments in a meaningful way for the first time since the pandemic. Here are the trends driving Back Bay’s rental market in 2024.
Back Bay Apartment Availability Increases In 2024
The current real-time availability rate (RTAR) for Back Bay apartments is 2.40%. That figure is up +160.87% compared to a year ago and +275.00% compared to late July 2022. Current apartment availability is more closely trending at pre-pandemic levels, when RTAR sat at 3.02% in late July 2019. It’s worth noting that while supply absorption was slow to start in 2024, it has accelerated considerably over the past few weeks. It will be interesting to see where RTAR bottoms out in late August and early September.
The current real-time vacancy rate (RTVR) in Back Bay is 0.72%, up +89.47% year-over-year and up +300% compared to late July 2019. Back Bay’s vacancy rate experienced an interesting hike on July 1, more than doubling from 0.41% in late June to 0.91% on July 1. This indicates that Back Bay may be trending away from the normal 9/1 leasing cycle that revolves around the academic calendar. High rent prices and low availability may be pushing student renters out of the market, which will result in much less seasonal turnover on 9/1.
The current median days on market for apartments in Back Bay is 22 days according to our most recent Back Bay apartment data. That figure is down -11 days from a month ago, showing that apartment demand is still strong in one of Boston’s most sought after rental markets. As more price-reduced apartments are hitting the market, demand has accelerated considerably in July. There have been a lot of interesting trends we have seen in different neighborhoods this year and Back Bay is no exception.
2024 Back Bay Average Rent Prices
The average rent price in Back Bay is currently $3,184. That figure is up +2.48% compared to late July 2023 and +16.08% over 2 years. As RTAR has remained higher this year, apartment prices have actually been trending downwards over the past few months. Back Bay’s average rent price is down -1.36% compared to 30 days ago and -0.69% compared to 3 months ago. Back Bay is the most expensive neighborhood to rent a 3 bedroom apartment in Boston, while it ranks 3rd most expensive for 1 bedroom and 2 bedroom apartments behind Seaport and Bay Village. It would make sense that the most expensive area would be the first to see prices turn around – so maybe this is the first indication of a broader trend that could cover all neighborhoods shortly – especially as we head into August.
Back Bay Apartment Rental Market Forecast 2024
As the 9/1 leasing date rapidly approaches, it will be fascinating to see where Back Bay’s RTAR bottoms out in 2024. It’s all but certain that apartment availability will not settle down to its 2023 low of 0.49% as it did last August, but the volatile supply over the last few weeks indicates that it will likely settle between 1.5-2% by September 1. At the end of the day, we are still battling with a supply crisis due to poor economic policies and bad policy decisions coupled with NIMBY which make it nearly impossible to bring on on new supply in the Back Bay.
It appears likely that more price reductions will begin to emerge as we approach September, which means apartment prices will likely continue to trend downwards as they have the last few months. If vacancies spike high above 1.5% on September 1, those price drops will continue through the fall months, which will effectively wipe out any rent price growth Back Bay recorded through the first half of 2024. Look for rent prices to end the year almost even by the end of the year. We will continue to monitor these trends as they develop on bostonpads.com.
Demetrios Salpoglou
Published July 31, 2024
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.
