The latest Apartment Research Market Update from Marcus & Millichap for the Boston metro area shows downtown Boston apartment (Boston Central/Beacon Hill/Back Bay) prices increasing by 4.0% since last year and currently standing at an effective rent of $2421. Vacancy is also down (to 4.8%).
Brookline and Brighton apartments have a vacancy rate of 3.5% and effective rents of $1849 (1.0% increase) while Cambridge and Watertown apartments are showing an even larger price increase of 5.0% to $2120 (with vacancy at 3.5%).
This confirms what I have seen from the street level. Available inventory is down, prices are up, and property owners again have the upper hand in negotiation with tenants. Boston is a popular place to live and we have several economic drivers bringing in new tenants each year (biotech, medical, university, etc). And, as sales have slipped, and more tenants have stayed in apartments rather than buy, the rental market has tightened. There's not a lot of development activity adding supply so don't expect this trend to change even if the economy as a whole stays relatively weak.
As for the forecast over the next year, the entire Boston metro area is expected to follow suit, with Marcus & Millichap predicting a small decrease in the metro Boston apartment vacancy rate coinciding with a 2% average increase in rents over the next year, although the downtown submarket is expected to see even higher rent increases.
If you're a tenant, there are definitely options for you, but the reality is that it is expensive, especially living in the more desirable downtown neighborhoods, like the Back Bay and Beacon Hill. You may want to expand your search just outside those areas to find more affordable options. Some of the parts of South End and Fenway especially have some new inventory coming on line that could be a great alternative for you.