Limited Supply Keeps Rents Afloat
Boston’s multifamily fundamentals proved resilient throughout 2023, with rent growth ending the year at 3.0%, while the national rate inched up just 0.3%. The metro remained one of the country’s tightest rental markets, with the occupancy rate in stabilized properties at 96.5% in November, following a minor 10-basis-point decline over 12 months.
Job gains remained on a moderating trend in 2023, expanding 2.4% in the 12 months ending in October, or 80,500 net jobs, slightly ahead of the 2.3% national rate. Reflecting a tight market, Boston’s unemployment rate stood at 2.7% in November, marking a 90-basis-point improvement since January. The metro outperformed the U.S. (3.7%) and the state (2.9%), according to data from the Bureau of Labor Statistics. Two sectors lost positions in the 12 months ending in October 2023—information (-1,400 jobs) and manufacturing (-100 jobs). Meanwhile, gains were led by the metro’s largest sectors: education and health services (27,300 jobs) and professional and business services (12,700 jobs).
Deliveries fell to the lowest volume in a decade, with only 5,405 units coming online in 2023. As of December, developers had 18,416 units under construction, with starts picking up. Meanwhile, investors traded $2.2 billion in multifamily assets in 2023. The price per unit rose 12% year-over-year, to $417,852, more than double the $185,172 U.S. figure.
Read the full Yardi Matrix Boston Multifamily Market Report: February 2024
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