What a difference a year makes. Just one year ago, Boston’s vacancy rate was struggling to recover from the damaging market effects of the pandemic. In March of 2021, the vacancy rate sat at 4.78%, which at the time was a +419.57% increase compared to March of 2020. Over the past year, Boston has recorded what must be the fastest market correction in history. Now that figure sits at 0.57%, a shocking -88.71% free fall in just 12 months.
A year ago is when most of Boston’s universities announced plans to nix remote learning for Fall 2021. The supply absorption that followed was unlike anything we’d ever seen. Student’s came back in full force in 2021, and now apartment availability is even more scarce than it was prior to the pandemic.
The previous all-time low vacancy rate for Boston apartments was set in late August 2019. At that point we were sitting on 99.58% occupancy and a paltry 0.42% vacancy rate. Vacancy rate has always hit its historical low during the last week of August in Boston, as it falls right before the critical 9/1 leasing date, when most leases begin in Boston. With 5 months to go until late August 2022 and record low apartment availability, the vacancy rate will undoubtedly bottom out well below 0.42% this year.
So what does that mean for the renter in Boston this year? It means 2 things. First, don’t expect to see a lot of options when you start your apartment search. Renter’s who act early in 2022 will find a much better selection of available apartments. That is true most years in Boston’s highly cyclical and highly competitive rental market, but that fact is even more relevant in 2022.
Second, it means rent prices are going to go up. Boston’s current rent price of $2,612 is only $44 shy of its all-time high ($2,646), and that record will undoubtedly be broken before September comes around. Look for many of the incentives that were common during the pandemic, like landlords paying broker fees, to dry up this year. Until the city figures out how to add more affordable housing to the rental supply, this trend will likely continue.