Boston Multifamily Report – November 2022
Going into winter, fundamentals are returning to more sustainable levels.
Boston has been making good strides toward a full recovery, but economic cooling and the Federal Reserve’s measures to stop inflation are causing a slowdown. This shift is reverberating across the multifamily market, which is already facing a dire housing shortage—with occupancy at 96.0 percent in August—and a high cost of living. Although rent development moderated in Boston—up 0.4 percent on a T3 basis through September—the environment has reignited talks about rent control. While no decision had been made as of September, the debate alone is already impacting the metro’s pipeline.
The jobless rate in Boston stood at 3.0 percent in August, according to data from the Bureau of Labor Statistics, outperforming the state (3.6 percent) and nation (3.7 percent). Employment expanded by 4.7 percent in the 12 months ending in July, 20 basis points above the U.S. rate. Government and financial activities lost 6,300 jobs combined. The rebound in tourism helped leisure and hospitality drive growth, with 46,100 jobs gained, followed by professional and business services (35,400 jobs).
Development moderated, with 3,497 units delivered this year through September, roughly 60 percent of the volume recorded during the same period last year; another 16,231 units were underway. Investment surpassed $2.5 billion, but most of the deals closed during the first half of the year. Meanwhile, the per-unit price decreased 6.8 percent year-over-year.