BOSTON (CBS) – Greater Boston’s tight rental market pushed rents up by double digits in the first quarter as an improving economy created pent-up demand for apartments.
The Boston area’s vacancy rate of 4.5 percent was second only to San Francisco’s 3.7 percent and the demand for apartments caused rents to surge by 8.6 percent — the fourth highest jump in the nation behind San Francisco, San Jose and New York, to an average of $1,945 in Greater Boston, compared with the national average of $1,066, according to new survey data from Axiometrics and Property & Portfolio Research, a CoStar Group company.
“It’s definitely the year of the landlord,” said Keith Harrington, co-owner of Boston-based property manager Hillway Realty Group where he’s seen rent hikes of 7 to 10 percent since January. “Rents are crazy. I can’t keep an apartment listed in Jamaica Plain for more than a week.”
Landlords and brokers say hard-to-get mortgages, renters who previously doubled up but are now seeking their own places, adult children leaving home, and more students seeking apartments are combining to push up rents to historic highs.
Average rents in the Hub spiked 14.9 percent to $3,527. Back Bay led the way where the average rent soared 19.6 percent to a whopping $3,764. The Seaport District swelled 15.5 percent to $2,769. Charlestown rents jumped by 11.6 percent to $3,042, Fenway rents escalated 3.7 percent to $3,891, and average rents in the West End increased by 13.9 percent to $3,353.
“Boston has all the amenities and the panache, and renters are willing to pay for it,” said Mark Hickey, real estate economist at Property & Portfolio Research.
Renters won’t find much relief across the river in Cambridge, where rents increased by 11 percent to $2,772. Central Square saw the biggest increase in rents at 20.6 percent to $2,892, and Kendall Square average rents jumped by 13.3 percent to $3,417.
Hickey expects the market to cool down a bit, but still sees rents increasing by about 5 percent per year.
“Everybody and their brother wants to build an apartment building these days,” he said.
Lisa van der Pool of the Boston Business Journal can be seen weekdays at 6 a.m. on WBZ-TV.
You can follow Lisa on Twitter at @lvanderpool.