Boston Multifamily Report – Summer 2020
- Sep 15, 2020
Just weeks after reopening its economy, Boston’s hitting the pause button. The multifamily market is struggling to adjust to the conditions of the pandemic. Rents had been on a cold streak of 11 consecutive months of contraction, culminating in a 0.4 percent decline on a trailing three-month basis through July. That’s worse than the U.S. average that saw a 0.1 percent decrease during the same period. The metro’s $2,257 average remained well above the $1,460 national figure.
Unemployment numbers showcased the magnitude of the damage inflicted by the COVID-19 pandemic. The metro’s rate—which in March stood at 2.7 percent—ballooned to 16.2 percent in May, while preliminary June data pointed to a new 70-basis-point rise. Leisure and hospitality shrunk by 58.7 percent in the 12 months ending in May, but Boston’s main economic drivers—education and health services and professional and business services—held on and marked contractions of 10.7 percent and 7.7 percent, respectively. Overall job gains declined 5.3 percent, underperforming the 3.3 percent U.S. rate.
Sales crashed in the second quarter, amounting to just $482 million in the first half of 2020, for a per-unit price that still rose 28.9 percent to $379,284. Meanwhile, developers delivered 3,605 units and had 20,584 underway, despite the early measures taken by local officials that halted construction at the onset of the outbreak. We expect rents to slide 1.2 percent in 2020.