South of Boston, rents rise along with demand
Prices climb twice as fast as in Greater Boston overall
Rents in Greater Boston are soaring. But not where you might expect.
While new luxury apartments flood into the core of the city, commanding big sums for prime locations, rent is actually rising faster farther afield.
Average rents have climbed almost 10 percent in the past year in Boston’s southern suburbs — a belt of towns running from Plymouth to Franklin — according to figures released last week by the real estate data firm Axiometrics. That is twice as fast as in the region as a whole and much faster than in pricier markets such as central Boston and Brookline.
Developers have spent the past few years piling high-end apartments into the core of the city, but are building less in the suburbs. With so much new inventory on line in Boston, prices — though high — aren’t growing as fast.
Those who are priced out of the city, meanwhile, are driving up rents in outlying markets. Those places haven’t seen as much new construction, said Michael Roberts, senior vice president for development at AvalonBay Communities Inc., which operates more than 8,000 apartments in Greater Boston.
“Demand is still there but there’s a lack of new supply,” he said. “Add in the affordability factor and you have a lot of people looking in these markets.”
David Boyea sees it all the time.
The owner of Marina Bay Realty in Quincy, Boyea has seen a lot of renters hunting for apartments in his neck of the woods lately. Some are newcomers to the region, looking for the bigger spaces and lower rents they grew accustomed to in less-expensive cities. Others are tired of the hassle and high price of renting in central Boston, but still want a manageable commute.
“For a long time, a lot of people didn’t really pay attention to places like Quincy and Weymouth and Norwood,” he said. “In the last two years, that has started to change. And it didn’t take long for landlords to figure out they could charge more.”
Indeed, Roberts said, Avalon has been able to raise rents faster at its suburban properties — it has complexes in Randolph, Sharon, Plymouth, and elsewhere south of Boston — even as it offers small discounts to fill its new buildings downtown.
“There’s just a lot of pent-up demand” in the suburbs, he said.
To be clear, the price gap is still wide. Average rent in the south suburbs is $1,777 a month, Axiometrics said. That’s about one-third lower than rents in inner-ring areas such as Newton and Cambridge, and roughly half what renters pay in downtown Boston, where the average is $3,599.
That dynamic actually locks many renters into place, said Gilbert Winn, chief executive of Winn Cos., which manages about 16,000 affordable and market-rate apartments in Massachusetts. And that makes it easier for landlords to raise rents in less expensive areas.
“The people who live there essentially can’t afford to move,” Winn said. “You’re more willing to pay a 5 percent increase to renew your lease than 20 percent more to move” to a pricier neighborhood.
On top of that, strong job growth and a high number of young adults who aren’t ready — or can’t afford — to buy a house are driving demand across the region, said Chuck Ehmann, a real estate economist at Axiometrics, which tracks apartment and student-housing markets nationwide.
That means that rents in oft-overlooked pockets of the Boston area are likely to keep going up.
“I don’t think this is really going to stop,” Boyea said.