When I looked into how Boston apartment listings have changed year-over-year in June I saw that rents had been falling, and wrote:
I think we're probably not done, though. Many landlords are small, and slow to react to changing market conditions. We're playing reverse musical chairs, where many landlords are going to be stuck without a tenant come September first. The ones who have realized this are offering lower rents, trying to keep their tenants, and as we get closer to September I expect more will catch on.
This does seem to be happening, though perhaps less dramatically than I had predicted:
While in June most of the decrease had been in high-end apartments and the median 2br had dropped only slightly, at this point, in August, there are decreases across the board and the median 2br listing is down ~8%.
While 2br apartments are the most common size in the Boston area, different unit sizes have been affected differently:
Smaller apartments, studios through 2br, have gotten cheaper, but 3br and 4br units are roughly unchanged, and 5br units have gotten noticeably more expensive.
I don't know what's driving this. You could tell a story where covid and remote work/school means people are willing to pay more for more space, but if the data were the other way around you could tell a story where the people who needed more space were moving out of the city.
Another thing to keep in mind is that these are listings, which means they're what landlords are asking and not necessarily what they're getting. And it looks like landlords are still adjusting to the musical chairs nature of the current situation:
This is the number of units listed each month relative to the same time last year. You can see that the market is tighter than last year for larger units. For 2br and smaller units, however, there are many more still on the market than last year and there the delta is growing. This matches what we saw above with prices.
I'm happy to see the area become more affordable, but I wish this weren't the reason why.
Comment via: facebook
Huh, my instinctive (and thus likely to be wrong) hypothesis is that coronavirus hasn't economically hurt rich people very much, so the competitive house price dynamics for big units are still going on, while it has hit poorer people much harder.
My hypothesis would be that 3+ bedrooms are roommate situations and risks and costs are more distributed and, thus, a little more sticky.