The rental market has rebounded extremely well this summer and has in most cases reached 2019 levels of activity and pricing. As can be seen in the datasheet below, Boston 1 bedroom apartments have reached 97% of the July 2019 prices and 98% of the August 2019 prices. Boston 2 beds have reached 99% of July 2019 prices and 98% of August 2019. Boston 3 beds reached 100% of July 2019 pricing and 104% of August 2019 prices. It is a similar story for Brookline where 1 bedroom apartments reached 96% of both July and August 2019 pricing, 2 beds reached 95% of July 2019 prices but saw a drop in August at only 84% of 2019 prices. 3 bed apartments in Brookline meanwhile exceeded 2019 pricing by 107% in both July and August.
The sharp decline in August for Brookline 2 bedroom apartments would indicate that there is still residual PTSD when it comes to surviving the pandemic market which saw prices plummet 20+% last year. Based on data from the MLS and our internal database, there has been a strong push in the past 30 days to make sure no units go vacant by 9/1, with 268 one bedroom apartments having been rented in Brookline in the past 14 days and over 400 one beds in the past 30 days. Brookline two bedroom activity has lagged slightly but has also been strong with 200 two bed units renting in the past 14 days and 300 units renting in the past 30 days. As of the time of this writing, there are currently 89 one bedroom apartments available in Brookline and 98 two bedrooms. From a historical standpoint, Boston has seen 151% of available inventory be absorbed since July vs. 122% during the same period in 2019. Brookline by contrast has seen 217% of its inventory get absorbed since July vs. 243% in 2019.
As is proof positive that accepting pets helps move inventory, only 2 of the remaining one and two bedroom units available in Brookline are pet friendly. As stated differently, all but 2 units that are pet friendly have already been rented. Any landlord that has available inventory should consider accepting a pet, as it is one way that could provide an edge over the remaining competition.
That said, pricing is still the #1 driving force of activity. Those renters that are still looking for apartments generally have flexible move dates and are using the time of year to their advantage to find the best deals. In a typical rental season, you can expect to see prices drop between $25-$50 per bedroom between July and August in a race to avoid September vacancy (2019 being the exception for 2-3 beds in Brookline which saw increases in pricing due to lack of inventory). This year we are seeing even more significant reductions in pricing for 1-2 bedroom inventory with pricing of 2 bedroom inventory being slashed 10% in one month. Better than the 20+% reductions from last year but significant nonetheless. For those landlords with vacant apartments or units that are about to go vacant that haven’t already had a price reduction, it would be in their best interest to consider a price correction or face almost certain vacancies and lost income.
The sales market remains strong throughout all of the greater Boston area, although in a sign of slight softening in the marketplace, listing times have started to creep up and once unthinkable price reductions are becoming more commonplace. While bidding wars are still very much prevalent in those areas with the tightest inventory, they are no longer a sure thing. Many buyers are waiting before throwing their hats in the ring to see if there is some flexibility in the pricing or at the very least hoping not to have to pay over the list price.
If you’re considering buying a home in the near future, reach out to a Metro Agent today to learn about all of your options!