$2,728 4Q 2023
$2,845 4Q 2024
4.3%
96.1% 4Q 2023
95.8% 4Q 2024
-30 POINTS
2.87M 2023
2.90M 2024
2.7% 2023
3.0% 2024
* Please note that these employment figures have been adjusted for seasonal variations and are based on Moody’s Analytics forecast as of January 1, 2024.
** Please note that these unemployment rates are estimates that have not been adjusted for seasonal variations, and they are derived from Moody’s Analytics forecast as of January 1, 2024.
Boston’s apartment market rebounded strongly by the end of 2023, with a net absorption of roughly 7,000 units. High occupancy rates above 94% are expected to continue over the coming year.
Boston added 8,797 new units and has 12,222 under construction in 2023. Looking ahead into 2024, the balance of new supply with strong demand is anticipated to maintain high occupancy and stable rent levels.
The market’s rent growth is forecasted to increase 4.3% over the next year, outpacing the national average. This improvement will be felt across all submarkets.
Closing out 2023 with a firm $2.6 billion in sales, Boston’s robust investment climate continues to be underpinned by unwavering investor interest, solid fundamentals and a strong job market.
FORECASTED ABSORPTION
FORECASTED NEW SUPPLY
By the end of 2023, Boston’s apartment market witnessed a significant recovery, marking a net absorption of 6,966 units, the highest since 2021 and in line with historical patterns. The one-year forecast predicts positive net absorption in 24 out of 31 submarkets by the end of 2024. Key demand areas such as Fenway/Mission Hill, South Plymouth County, and Roxbury/Dorchester are expected to contribute 30% of the total absorption across these submarkets. The upcoming four quarters look promising for Boston’s multifamily market, with an anticipated absorption of 5,030 net units, matching the estimated number of new units becoming available during this period.
The multifamily market in Boston maintained a strong occupancy rate of 96.1% by the final quarter of 2023, despite a slight year-over-year decrease of 30 basis points. Occupancy rates remained high across various property classes, with all but one of Boston’s submarkets having rates above 94%. Notably, Back Bay/South End and New Hampshire Beaches led with over 97% occupancy. Moving into 2024, the market is expected to experience a minor dip in occupancy, settling around 95.8% by Q4 due to supply and demand dynamics. However, the majority of submarkets are projected to maintain solid occupancy rates above 94%.
Boston has demonstrated impressive resilience during the pandemic, outperforming many other coastal gateway markets. By the end of 2023, the city’s apartment market saw the addition of 8,797 units, a figure in line with historical norms. A significant portion of the new apartment inventory over the past year was contributed by developments in South Plymouth County.
Currently, there are 12,222 apartment units under construction in Boston, with 5,559 of these expected to be completed within the next year. A large share of these upcoming units will be delivered in Fenway/Mission Hill. Despite new inventory being concentrated in 19 out of Boston’s 31 submarkets, the combination of strong demand in the market and ongoing economic growth is likely to support high occupancy rates and maintain stable rent levels. This trend underscores the solid fundamentals of Boston’s apartment market, reinforcing its resilience and ensuring its continued stability in the face of challenges.
Average Monthly Mortgage Payment
Average Monthly Rent
In 2023, the Boston apartment market experienced a modest rent growth of 2.4%, with average multifamily rents reaching $2,728 per month. This rate, though below the city’s long-term historical average, still surpasses the national benchmark. The recent slowdown in rent growth is attributed to the influx of new supply alongside a demand that is still normalizing after its decline in 2020 and subsequent rapid recovery in 2021.
Looking forward, Boston’s multifamily rent growth is projected to accelerate, 4.3% over the next year, a rate that significantly will exceed the national average. All submarkets across Boston are expected to show strong performance in this period above 3.6%. The high-end Back Bay/South End neighborhood is anticipated to lead with an estimated 4.7% year-over-year rent growth for 2024. Even more affordable areas, such as Strafford County, are predicted to witness a similar uptick in rents, at around 4.6%. Overall, these trends indicate that Boston is likely to continue its steady performance as a major market, maintaining its standing among the nation’s top markets for apartment rentals.
| Submarket | Q4 2023 Stabilized Occupancy | Q4 2024 Stabilized Occupancy (f) | Annual Occupancy Change (2024/2023) | Q4 2023 Average Monthly Rent | Q4 2024 Average Monthly Rent (f) | Annual Rent Change (2024/2023) |
|---|---|---|---|---|---|---|
| 495 | 95.7% | 95.3% | -0.4% | $2,305 | $2,409 | 4.5% |
| 93 North | 96.6% | 96.4% | -0.3% | $2,600 | $2,708 | 4.2% |
| Alewife | 95.6% | 95.2% | -0.4% | $3,125 | $3,244 | 3.8% |
| Allston/Brighton | 96.1% | 95.8% | -0.3% | $2,850 | $2,972 | 4.2% |
| Back Bay/South End | 97.8% | 97.6% | -0.2% | $3,832 | $4,011 | 4.7% |
| Brookline/Newton/Watertown | 97.1% | 96.8% | -0.3% | $3,147 | $3,290 | 4.5% |
| Burlington/Woburn | 96.6% | 96.3% | -0.3% | $2,787 | $2,889 | 3.6% |
| Chelmsford/Tyngsborough/Townsend | 94.4% | 94.0% | -0.4% | $2,380 | $2,477 | 4.1% |
| Downtown Boston | 96.8% | 96.6% | -0.2% | $3,874 | $4,051 | 4.6% |
| East Boston/Chelsea | 95.9% | 95.6% | -0.4% | $2,760 | $2,876 | 4.2% |
| Everett/Malden/Medford/Melrose | 95.2% | 94.9% | -0.4% | $2,653 | $2,762 | 4.1% |
| Fenway/Mission Hill | 96.2% | 95.9% | -0.3% | $3,392 | $3,525 | 3.9% |
| Harvard MIT | 95.4% | 95.1% | -0.3% | $3,658 | $3,819 | 4.4% |
| JP/Roslindale/West Roxbury | 96.8% | 96.5% | -0.3% | $2,457 | $2,557 | 4.1% |
| Lawrence/Haverhill | 96.4% | 96.1% | -0.3% | $2,005 | $2,093 | 4.4% |
| Lowell/Dracut | 97.2% | 96.9% | -0.3% | $1,936 | $2,025 | 4.6% |
| Metro West | 96.8% | 96.5% | -0.3% | $2,476 | $2,588 | 4.5% |
| New Hampshire Beaches | 97.8% | 97.5% | -0.3% | $2,079 | $2,174 | 4.6% |
| North Shore | 97.1% | 96.8% | -0.3% | $2,375 | $2,478 | 4.3% |
| Quincy/Milton/Randolph | 94.7% | 94.3% | -0.5% | $2,525 | $2,624 | 3.9% |
| Route 1 North | 96.5% | 96.1% | -0.4% | $2,359 | $2,462 | 4.4% |
| Route 1 South | 95.5% | 95.2% | -0.4% | $2,468 | $2,576 | 4.4% |
| Route 2 | 97.1% | 96.8% | -0.3% | $2,711 | $2,834 | 4.6% |
| Roxbury/Dorchester | 89.1% | 88.5% | -0.7% | $2,642 | $2,739 | 3.7% |
| Somerville/Charlestown | 94.9% | 94.5% | -0.4% | $3,140 | $3,266 | 4.0% |
| South Boston/Seaport | 96.4% | 96.2% | -0.2% | $4,125 | $4,286 | 3.9% |
| South Plymouth County | 97.1% | 96.8% | -0.3% | $2,248 | $2,333 | 3.8% |
| South Shore | 95.5% | 95.1% | -0.4% | $2,442 | $2,548 | 4.3% |
| Strafford County | 97.3% | 96.9% | -0.3% | $1,737 | $1,817 | 4.6% |
| Suburban Rockingham County | 97.6% | 97.3% | -0.3% | $1,909 | $1,993 | 4.4% |
| Waltham/Arlington/Belmont | 96.1% | 95.8% | -0.3% | $2,844 | $2,974 | 4.6% |
| Market | 96.1% | 95.8% | -0.3% | $2,728 | $2,845 | 4.3% |
4Q 2023 Unit Inventory
Number of Units Under Construction
Number of Units UC Delivering
In the Next 4 Quarters
| Submarket | Unit Inventory: 4Q 2023 | Units Under Construction | % of Existing Inventory UC | % of Total UC | Units UC Delivering In the Next 4 Quarters |
|---|---|---|---|---|---|
| 495 | 5,428 | 0 | 0% | 0.0% | 0 |
| 93 North | 8,134 | 503 | 6% | 12.2% | 279 |
| Alewife | 5,357 | 49 | 1% | 1.2% | 0 |
| Allston/Brighton | 10,496 | 1,194 | 11% | 28.9% | 264 |
| Back Bay/South End | 11,377 | 0 | 0% | 0.0% | 0 |
| Brookline/Newton/Watertown | 10,419 | 781 | 7% | 18.9% | 291 |
| Burlington/Woburn | 6,717 | 96 | 1% | 2.3% | 95 |
| Chelmsford/Tyngsborough/Townsend | 5,164 | 200 | 4% | 4.8% | 199 |
| Downtown Boston | 11,500 | 0 | 0% | 0.0% | 0 |
| East Boston/Chelsea | 6,083 | 1,077 | 18% | 26.1% | 474 |
| Everett/Malden/Medford/Melrose | 11,947 | 1,587 | 13% | 38.4% | 449 |
| Fenway/Mission Hill | 10,836 | 881 | 8% | 21.3% | 880 |
| Harvard MIT | 10,782 | 38 | 0% | 0.9% | 0 |
| JP/Roslindale/West Roxbury | 7,170 | 380 | 5% | 9.2% | 201 |
| Lawrence/Haverhill | 10,128 | 305 | 3% | 7.4% | 23 |
| Lowell/Dracut | 6,929 | 0 | 0% | 0.0% | 0 |
| Metro West | 14,182 | 636 | 4% | 15.4% | 275 |
| New Hampshire Beaches | 3,169 | 0 | 0% | 0.0% | 0 |
| North Shore | 13,853 | 313 | 2% | 7.6% | 179 |
| Quincy/Milton/Randolph | 12,741 | 305 | 2% | 7.4% | 0 |
| Route 1 North | 12,602 | 898 | 7% | 21.7% | 453 |
| Route 1 South | 9,218 | 0 | 0% | 0.0% | 0 |
| Route 2 | 4,768 | 0 | 0% | 0.0% | 0 |
| Roxbury/Dorchester | 8,094 | 793 | 10% | 19.2% | 245 |
| Somerville/Charlestown | 6,403 | 253 | 4% | 6.1% | 24 |
| South Boston/Seaport | 6,748 | 77 | 1% | 1.9% | 0 |
| South Plymouth County | 9,758 | 269 | 3% | 6.5% | 0 |
| South Shore | 10,920 | 270 | 2% | 6.5% | 269 |
| Strafford County | 6,066 | 418 | 7% | 10.1% | 417 |
| Suburban Rockingham County | 6,021 | 230 | 4% | 5.6% | 229 |
| Waltham/Arlington/Belmont | 8,822 | 669 | 8% | 16.2% | 313 |
| Market | 150,422 | 12,222 | 8.1% | 100.0% | 5,559 |
In 2023, Boston’s multifamily real estate market demonstrated resilience, maintaining robust sales activity amidst a nationwide dip in transaction volumes. The market witnessed a total of $2.6 billion in apartment asset sales last year, marking a modest 11.2% decrease from the 2022 figures. Despite this drop, the annual deal volume closely mirrored the pre-pandemic levels. Notably, the fourth quarter alone saw a significant increase in activity, with sales reaching approximately $647 million, a 22% rise from the same period in the previous year, distinguishing Boston from other markets.
Furthermore, the market remained strong in terms of per-unit pricing, which averaged $426,500 by the end of the year, up 6.8% annually. In terms of property types, mid/high-rise deals constituted 76% of all transactions last year, with garden-style properties making up a smaller portion. Additionally, the composition of buyers in Boston’s multifamily market evolved in 2023. While public and institutional buyers seemed to pull back a little, there was heightened interest from private and international investors. Historically, private investors have predominated in acquisitions within the Boston market, often alternating with institutional investors. This trend suggests that sustained focus on similar properties could keep the transactional momentum in Boston’s market buoyant in the foreseeable future.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
P=Preliminary
| Sector | Employment Change 2023 to 2024 | Percent Change |
|---|---|---|
| Overall Employment | 26,200 | 0.9% |
| Manufacturing | 100 | 0.1% |
| Construction | 2,100 | 1.7% |
| Trade, Transport., & Utilities | 4,800 | 1.1% |
| Information | 200 | 0.2% |
| Financial Activities | 1,600 | 0.8% |
| Professional & Business Services | 1,800 | 0.3% |
| Education & Health Services | 10,300 | 1.7% |
| Government | 2,100 | 0.7% |
| Leisure & Hospitality | 2,600 | 1.0% |
| Natural Resources & Mining | 100 | 20.0% |
| Other Services | 600 | 0.6% |
The Greater Boston area has exhibited remarkable job growth, with a 3.5% increase in employment by the end of 2023, achieving a low unemployment rate of 2.7%, well below the national average. The region is expected to add around 26,200 new jobs in the upcoming year. The Education & Health Services sector, bolstered by a highly educated workforce, leads regional employment and is set to grow significantly, contributing 39% of Boston’s new jobs. The Trade, Transport, & Utilities sector also promises notable job additions. Boston’s short-term economic outlook is optimistic, benefiting from lower outmigration and fewer pandemic-related social issues compared to other major markets. The city’s economic strength is underpinned by its role as a major hub for prestigious educational and research institutions including Havard and MIT, alongside thriving sectors like biotech research, healthcare, information services, professional and business services, and finance. Companies like AstraZeneca, Moderna, and financial giants such as Fidelity and John Hancock highlight the diverse economic base. Looking ahead, Boston’s vital industries and skilled labor force position it for strong economic performance relative to the nation and its peer markets.
