Boston Globe real estate stories
More people with higher budgets are looking to move to Boston, and it may be forcing current residents to look outside the city for affordable places to live, according to a new report from Apartment List, an online rental marketplace.
The quarterly report, released July 13, found that of the people searching for places to rent in Boston, 37.6 percent live outside the metro area, above the national average (31.5 percent). Furthermore, those searching from outside the Boston area tended to have 7 percent more money to spend on housing than current residents.
“In Boston we’re seeing above average in-bound search interest,” said Rob Warnock, a senior research associate at Apartment List, and their budgets are about $140 higher on average ($2,090) than those of Boston residents looking within the city ($1,955).
Boston isn’t the only city feeling the effects. Nationally, people looking to move within the city in which they reside have the lowest average budget ($1,249), while those looking to move to a new city in a new state have an average budget of $1,544, the report found. This trend holds true in the 100 largest metropolitan areas across the country, the report indicated.
One factor may be rising rents nationwide, Warnock said. In June alone, rents jumped 4.4 percent, a staggering amount compared with the same month in 2019 and 2018, which saw 1.5 and 1.2 percent increases, respectively, according to Apartment List data.
The current state of the housing market may also play a role, Warnock said. “We know that inventory in the for-sale market is really low, and prices are really high. … Most people rent until they can buy a home,” he said. In this seller’s market, however, home buying is out of reach now for people previously on the cusp.
Those who just miss out on being able to afford a home are “probably at the higher end of the income distribution when we look at the rental pool,” he said.
Ronel Remy, a community organizer with Boston-based City Life/Vida Urbana, said out-of-towners are not to blame for rising rents and identification. Remy blames the corporations that buy buildings and jack up rents or enforce “no-fault evictions,” in which tenants are forced out despite being in good standing and current on their rent payments.
“It’s not the people who come in who are earning $200,000 or $150,000 who are responsible; it’s the corporations with billions of dollars who are hiding behind them,” Remy said. “It’s the bigger fight.”
Some of the bigger budgets Boston is seeing may simply be a response to new, more expensive apartments corporations have created, Remy said. “When you allow someone to come in and build a luxury apartment, you basically raise the price of the community and you’re asking folks to pay what they cannot afford now,” Remy said.
What does this mean for renters already living in Boston or those looking to move to a different neighborhood in the city? According to Boston Pads CEO Demetrios Salpoglou, it is “still a Goldilocks time” for renters in Boston — but maybe not for much longer.
“From July 5 to July 12, we went from 6,091 available apartments to 5,336,” an extremely steep drop for just one week, Salpoglou said. Right now, landlords are offering to pay the broker’s fee on 48.91 percent of the apartments listed on Boston Pads, Salpoglou said, a number that normally sits between 3 and 5 percent. “If the database keeps going down by 750 units a week, I think we’d have to be really close to where landlords would say, ‘Let’s tighten it up,’ ” he said, with landlords becoming less inclined to offer deals or incentives to new renters.
Based on data pulled from the 183,465 listings on the Boston Pads website, rents are still down year over year and the percentage of vacant apartments this month is similar to what Boston saw in July 2019.
Salpoglou said he has noticed higher Web traffic on his site and bigger budgets in some of the leads. More people are looking at apartments on Boston Pads, and some of those making inquiries do seem to be willing to spend more on rent. “We’ve seen some incredible leads, $4,000, $5,000 two-bed leads, three-bed leads for $6,000,” he said. Some of this, he said, may be from renters daunted by the current housing market.
“I think that there are people who have looked at this market, with all these “overaskings” and no contingencies, and they’ve just decided: This is too risky for me. Why not grab an apartment that is underpriced and see what happens in a year or two?’ ” Salpoglou said.
But where are the renters coming from
People looking to move to Boston were most likely searching from New York City, Providence, and Worcester, according to the report. Those looking to leave were eyeing Washington, D.C., New York City, and Baltimore.
Real estate-related stories appearing in this week’s Boston Globe:
More home sales hinge on “I’ll buy if I can sell”
A slowdown in home sales is forcing prospective home buyers to put a condition on their offers for residences in Boston’s suburbs: I’ll buy your house only if I can sell mine.
Homeowners trying to trade up to a bigger house or a community with better schools, or empty-nesters attempting to sell their big family home before moving into a downtown condominium, increasingly are adding a contingency to their offer to buy a new home specifying it can be withdrawn if the buyer cannot sell his or her own house.
Today, the talk from Back Bay to Interstate 495 is again about the possible collapse of a housing bubble. But even with prices seemingly in the stratosphere, experts say there is no way to know if we’re headed for a repeat of the 1990 bust — when home prices in the Boston area fell 16 percent — or even for a flattening of prices before the next advance.
Should we worry?
Suburbia — where fierce bidding wars were once waged on cul-de-sacs for Capes and Colonials — is under a cease-fire. With single-family home inventories up 40 percent over last year, many real estate watchers are speculating whether the slowdown portends a coming buyer’s market.
Last week, MLS Property Information Network Inc. reported there were 25,843 single-family homes on the market in Massachusetts, which is the highest number of homes recorded since MLSPIN was incorporated in 1998, said Melissa Lindberg, the company’s director of marketing.
The Massachusetts Association of Realtors reports there were 34,930 single-family homes on the market between April and June 2005, which is the most since the second quarter of 1996, when 36,414 homes were listed.
Mingling with serious house hunters are more casual observers who visit open houses almost as a hobby — those curious about the architecture, seeking a better sense of local home values, looking for decorating tips, or who are just plain nosy.
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