Banker & Tradesman, yesterday, reported that despite the current slowdown in residential sales statewide the rental market is looking at projected increases of 3.9% in 2008 and 3.8% in 2009 due to good/average job growth. Every area of the Boston Metro region experienced growth except the North Shore due to a glut of new apartments.

Companies like AvalonBay Communities, Northland Investments Corp and Roseland Property Corp. have added thousands of apartments on the North Shore. AvolnBay has built roughly 1,000 apartments in Saugus, Danvers and Peabody

What I found surprising is that our market will absorb the glut of condo’s that have been languishing on the market for sale and are now looking for renters instead. Here is what Mark Hickey, Real Estate Economist of Property & Portfolio Research, the company who created this report, had to say…

Boston is a supply constrained market for apartments. A lot of people [investors] like Boston because supply is predictable and it is difficult to build…noting that it can take years to get a project through the approval process

and on the glut of condo’s…

Boston did not have the level of ground-up condo construction that happened in the Southeast and Southwest… also noting that in the Boston market condo’s tend to be larger than apartments making conversion difficult

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To close out this post. The average rent of a two bedroom apartment in Metro Boston is $1,523.00 and the vacancy rate stands at about 5%. The vacancy rate impresses me more than the rent. There are an awful lot of projects about to come online in the next two years and we’ll continue to absorb all of them.

Original Article: Things getting Tight Within Rental Sector, By Aglaia Pikounis, Banker & Tradesman.

Filed under: Boston Real Estate Trends and Statistics, Boston Rental Resources, Luxury apartments