As Rent Rises In Boston, Apartment Construction Booms

As the real estate market and home ownership in general continues to struggle all around the nation

, many of the residents in Boston now opt to rent instead. Because of this, the demand for rental units is soaring. The incentive for many developers in Boston to construct towering projects including different Boston luxury apartments is high as they need to meet the rental demand.

During the year, apartment complexes are built by various builders. When combined, these complexes can produce more than 850 apartments. In the month of October alone, one builder has revealed their plan to build 295 new apartments in Chinatown, Boston. These apartments will surely answer the high demand for rentals and including Boston luxury rentals.

The vacancy rate in Boston is dropping, which further encourages the rush of building activity. With the rising rent rate in Boston, according to research the average rent for a Boston apartment is about $1,773 per month, Boston is now the fourth most expensive rental market in the country. For the developers this makes Boston an ideal place to invest especially for those that are in the business building apartments.

The building of new apartments will benefit not only the developers but also the renters. According to real estate specialists, building more new apartments will increase the supply and thus will moderate the average price of rental units, which is obviously something that is beneficial to renters. Marcus & Millichap National Apartment Index listed Boston as the third strongest real estate market for apartment and housing rentals.

In contrast to the high demand for apartment rentals in Boston the market for homeownership is declining. This is most likely due to the tough economy, flat housing values, tougher bank lending rules and the growing number of foreclosures. Investors or lenders are now more than willing to invest in building apartments like Fenway Apartments as opposed to invest in the condominium construction industry.

At present, the majority of housing project proposals in Boston include rental units. In the month of October, a 381-unit building started construction on Washington Street. Another developer is in the process of building a 187-unit tower in Back Bay as well as a 286 unit apartment complex on the Rose Fitzgerald Kennedy Greenway.

Aside from the construction that is underway, many other projects for apartment rentals are moving to Boston very soon. This also has promising and positive effects for an economy and housing market that is struggling in many places to recover from the recent economic downturn. More construction activity and investment in rental housing can definitely have a positive impact on the overall economic situation of the Boston area.

by: Bruce Garland

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