Boston Multifamily Report – June 2023
The city remains one of the country's tightest markets.
With occupancy at 96.6 percent in March, following a 30-basis-point year-over-year downtick, Boston still boasts one of the tightest rental markets in the U.S., behind only a few metros. The new leasing season invigorated rent growth, up 0.6 percent on a trailing three-month basis through April, and 5.2 percent year-over-year, to $2,735. The national rate rose 0.2 percent on a three-month basis (3.2 percent year-over-year), to $1,709.
Boston’s jobless rate stood at 3.4 percent in March, slightly ahead of the state and national figures, both at 3.5 percent, according to data from the Bureau of Labor Statistics. Still, the job market has yet to reach pre-pandemic levels. Job growth further decelerated to 2.7 percent, or 81,200 jobs, in the 12 months ending in February, lagging the 3.4 percent U.S. rate. More than 40 percent of gains were in the city’s two largest sectors—professional and business services (17,300 jobs) and education and health services (16,500 jobs). In recent months, Boston took the lead nationally for office stock under construction, with life science space accounting for most of the pipeline.
Development remained strong, with 1,328 units delivered through April—equal to 0.5 percent of total stock—and an additional 13,753 units underway. Yet, construction starts plummeted to a fraction of the volume recorded a year ago. Meanwhile, investment tapered off, with just $287 million in multifamily assets trading through April, for a price per unit that rose 9.6 percent year-over-year.