I think we’ll see a Boston rental correction in 2019 is due to excess supply of vacant apartments. Once again, lets look at my neighborhood of Beacon Hill. Under normal market conditions Beacon Hill would have between 25 – 40 vacant apartments in late September and early October. As of the writing off this blog post we have over 80 apartments available. This trend is happening not only in Beacon Hill, but throughout the Greater Boston area.
Second reason for a Boston apartment correction, is due to Mayor Walsh’s action of curbing Airbnb. This will bring a large pool of apartments hitting the market in 2019 as Mayor Walsh’s policy will become law. Lastly, the increase vacancies in Boston luxury apartments especially in the Seaport District will result in downward pressure throughout the city. If my predictions are correct regarding the Boston apartment market it will lead to more and more Boston condo owners to place their condo on the market sale, as their ROI diminish with lower rents By 2021 we’ll begin to see increased downward pressure on Boston condo prices and the pendulum will swing from a Seller’s market to a Buyer’s market. Back Bay condos for sale Beacon Hill condos for sale Charlestown condos for sale Navy Yard condo sales Dorchester condos for sale Fenway condos for sale Jamaica Plain condos for sale Leather District condos for sale Midtown/Downtown high rise condos Seaport District condos for sale South Boston condos for sale South End condos for sale North End condos for sale West End condo sales East Boston condos for sale Before I dive into this blog post, I’m reminded of what Alexander Pope wrote in 1711 when he inked the saying “…..Fools walk in where angels fear to tread” (An Essay on Criticism). Since then this phrase has been used countless times to describe undertakings that many would advise against. With that said…. What’s happening to the affordability of the Boston condo market? From my perspective, as a Boston condo agent in 2018, there seems to be battlelines being drawn between local politicians, long time resident/owners vs businesses and Boston high rise condo developers, in this booming economy. It’s a battle over Boston condo prices, quality of life, saving the fabric of the culture of Boston, the changing city skyline and lastly, whether people’s dream of Boston condo ownership will ever be realized. What’s the root of the problem? Simple answer, general affordability is dying out and replaced by a new Boston luxury condos. In my neighborhood of Beacon Hill, lower priced condos have dried up and entry level is now in the $600,000 range on average. As of the writing of this post the least expensive condo is $624,000. The average asking price is above $1,200 per sq ft. for a 4th floor walk up. In Midtown/Downtown and Seaport District with new high rise condos prices are much, much higher. Strong sales of 3+ Million dollar condos is the norm for these Boston neighborhoods. When will it change? Hoards of millennials, working poor, and homeless people are praying for a Boston condo market crash, yet after a short lull, Boston condo prices in August and September have kept climbing. With such strong demand driving the whole Boston condo market in 2018 – 2019 and beyond, it’s unlikely a crash will happen soon. In fact, with the extra economic activity spawned by housing construction and household formation, there is upward price pressure. And the US economy as a whole is booming and we could be looking at an even longer run of economic prosperity. Are there any signs of a correction? There is an old Chinese proverb that says “…..a crisis is an opportunity riding a dangerous wind”. In our case, the crisis is what is taken place in the Boston apartment rental market.
