Vacancy rates for Boston apartments are soaring in the Greater Boston housing market. The city is seeing unprecedented numbers in terms of apartment supply after seeing an all-time low at the beginning of the year. This trend has been seen in many of the nation’s biggest housing markets as the population spreads out to suburban areas from densely populated city centers.
Fenway Apartment Vacancy Rate - 14.78%
North End Apartment Vacancy Rate - 11.34%
Northeastern/Symphony Apartment Vacancy Rate - 10.31%
Allston Apartment Vacancy Rate - 10.08%
Mission Hill Apartment Vacancy Rate - 8.83%
North End is close to Downtown, which has seen a huge year over year increase in vacancies as residents are gravitating towards the outer City limits. Fenway and Symphony are close to Downtown, but that argument can’t be made for Allston and Mission Hill. So why such high vacancy rates in these areas?
The answer lies in the driving force behind the Boston real estate market: the student population. Over 60% of Boston leases either begin or end on 9/1, as this is typically the beginning of the fall semester at most area colleges. That date has such a profound cyclical affect on the market that real estate agents focus much of their year on setting up leases for the 9/1 move-in date.
So if something were to happen that would cause a big decrease in the number of students pouring into the city in late August/early September, it would have a profound impact on the local apartment supply. Something like say, a global pandemic.
Much of the area’s universities have instituted remote learning for the 2020 fall semester. Those that aren’t fully remote have adopted some hybrid model, and as a result the areas that tend to have a larger percentage of student population are suffering the most in terms of excess vacancies.
Northeastern, Allston, Fenway and Mission Hill are all student enclaves for Boston University and Northeastern University, two of the area’s biggest universities. So it’s no surprise to see these areas topping the list in terms of apartment vacancies.
While landlords have been slow to drop prices in the face of less demand, that may change over the next few months. January brings in a new semester, and if the local universities don’t change their policies, we could be in store for a big price correction that would sent rent prices in a free fall. We’ll continue to monitor this situation as it develops.