Market Conditions in Boston>Question Details

Bobby Woofter, Real Estate Pro in Cambridge, MA

With a glut of new construction a few years from completion do you see anything taking pressure off the rental market any time soon?

Asked by Bobby Woofter, Cambridge, MA Tue Nov 29, 2011

There are several large residential projects in the works but it will be a year or two before any of these new projects are complete. Rental prices have gone crazy in Boston in the last year. I am curious if anyone foresees anything that might take pressure off rental prices before the new stock hits the market or are these prices here to stay?

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5
Laura Lass’ answer
I *think* the pressure on the rental market has more to do with home loans being out of reach for so many consumers. Many people want to buy a home but cannot get a loan. Some can't get the loan because of their recent mortgage default. This makes the supply of rentals lower than the demand for rentals, and the supply of homes higher than the demand. Making home prices lower and rent payments higher. I would think a balance will happen when the housing market gets a little healthier.

I find that big changes happen around election time, and I'm very interested in seeing where the market heads next year.
1 vote Thank Flag Link Tue Nov 29, 2011
The 200 schools and universitites in the general Boston/MA area help keeps rents stable anyway. In two years we may be beyond the current market problems, but the school kids will "always" be looking for apts.
0 votes Thank Flag Link Mon Dec 5, 2011
If they are priced out of where they are and rent elsewhere, then those lower rents are also higher than the landlord was previously getting.

All this is good, not bad for the housing market. Back to basics real estate.

As rents rise, there comes a point where, condo conversions are once again feasible, also it will help to increase demand for single family homes.
Web Reference: http://www.LouisWolfson.net
0 votes Thank Flag Link Wed Nov 30, 2011
Thats true the new projects are on the higher end but I have had several calls over the past year from people telling me that they are in a $1900 1 bed currently in one of the many luxury rental buildings. They said their landlord was raising the rent by $400-500. The biggest I saw was an $800 bump on a one bed in the West End.

This kind of raise at the top has a domino effect as people are priced out of where they are to slightly less high end places. I think a good block of high end rentals will pull pressure off of all of the market.

I also think the low supply side in Boston is as much to blame as the high load standards. There is not much quality stock on the market.
0 votes Thank Flag Link Wed Nov 30, 2011
Laura is correct. Supply and demand. But the new stock comming on will also be on the upper end.
0 votes Thank Flag Link Wed Nov 30, 2011
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