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Market Report: South End Apartments

By
Services for Real Estate Pros with ProSource Media

The South End has been one of the hottest rental markets in all of Boston over the past decade.  It has solidified itself as one of the most desirable neighborhoods in Beantown, home to the city’s best arts and cultural scene and widely considered to be the epicenter of Boston’s best restaurant offerings.  That combined with its close proximity to Downtown and local Universities, South End’s housing market has enjoyed a steady flow of demand for housing for a long time.  All that changed in 2020.

 

When the pandemic came to town, it reshaped the local housing economy.  Remote learning was put in place at every major local University, causing widespread vacancies in student enclaves like Allston, Mission Hill, Fenway, and South End.  Remote work led to a mass migration from Downtown to the Burbs, and from renting to purchasing.  The vacancy rate for Downtown apartments sits at 24.06%, a +2,730.59% increase year-over-year, while the median price for single family homes increased 12% amid a supply shortage of homes for sale. 

 

South End’s rental market, like other premium neighborhoods close to Downtown, saw quite a bit of disruption.  Apartment supply is higher than it’s been in years, while the South End average rent price is falling faster than most other areas.  As a result, renters are scoring deals on apartments in South End that previously weren’t in their price range.  Here’s a breakdown by the numbers:

 

South End Apartment Supply - A Surge In Vacancies

 

In April 2020, there were only 58 available apartments in South End, of which only 12 were vacant, marking an availability rate of 2.99% and a vacancy rate of just 0.62%, the 3rd lowest of all Boston neighborhoods.  A year later, there are 167 available South End apartments, of which 61 are currently vacant, marking a 184.28% YOY increase in availability and a whopping 445.16% YOY increase in apartment vacancies. 

 

South End Vacancy Rate 4/2020: 0.62%

South End Vacancy Rate 4/2021:  3.38%

YOY Vacancy Rate Change %: +445.16%

 

South End Availability Rate 4/2020: 2.99%

South End Availability Rate 4/2021: 8.50%

YOY Availability Rate Change %:  +184.28%

 

South End’s apartment supply glut can be attributed to the same forces causing vacancies in Downtown and near local schools. It’s located minutes from Downtown and just blocks away from the many Universities near Fenway.  So it’s no surprise that the housing supply in South End would be affected by remote work and remote learning.  Similar to Back Bay, South End is one of the best places to live in Boston for young professionals and a favorite amongst students looking for off-campus housing near their school.

 

As a result of this added inventory in the South End, apartment prices are down.

 

Average Rent Prices in South End

 

In April 2020, the South End average rent price was $3,481, edging out Back Bay ($3,423) as the most expensive neighborhood in Boston to rent an apartment.  Now, South End’s average rent price the 3rd highest in Boston at $3,245, lower than both Back Bay ($3,511) and Symphony/Northeastern ($3,255). 

 

Rent prices for smaller size units were affected much more drastically than larger size units.  Studio prices in South End fell by -13.59% over the past year, -10.88% for 1 bedroom units, and -7.38% for 2 bedroom units.  This can be attributed to a small inventory for large units (3BR+) in South End, which are always in high demand.  As a result, the prices for large units have remained relatively steady.   

 

South End Studio Apartment Average Rent Price 4/2020: $2,046

South End Studio Apartment Average Rent Price 4/2021: $1,768

YOY Change: -13.59%

 

South End 1 Bedroom Apartment Average Rent Price 4/2020: $2,646

South End 1 Bedroom Apartment Average Rent Price 4/2021: $2,358

YOY Change: -10.88%

 

South End 2 Bedroom Apartment Average Rent Price 4/2020: $3,265

South End 2 Bedroom Apartment Average Rent Price 4/2021: $3,024

YOY Change: -7.38%

 

South End 3 Bedroom Apartment Average Rent Price 4/2020: $3,964

South End 3 Bedroom Apartment Average Rent Price 4/2021: $3,799

YOY Change: -4.16%

 

South End 4 Bedroom Apartment Average Rent Price 4/2020: $5,485

South End 4 Bedroom Apartment Average Rent Price 4/2021: $5,276

YOY Change: -1.97%

 

Putting It All Together - Relief Is In Sight

 

As a result of these market forces, landlords in South End and many neighborhoods like it have been extremely flexible with renters.  In a healthy market, generally less than 4% of landlords will offer to pay the broker fee for a renter.  In 2021, as many as 50% of available listings are offering to pay the broker fee in places like South End, Fenway and Mission Hill in order to spur demand without lowering prices.  In reality, the overall cost to the renter is down significantly more than the average rent prices would reflect in these areas, as removing the broker fee or reducing deposit fees significantly lower what the renter pays in a 1 year lease. 

 

So for renters who previously thought they were priced out of the South End will be in a position to score some incredible deals over the next few months.  The deals are not likely to last, as Harvard, BU, UMass, and Northeastern have all announced that remote learning will be phased out for the fall semester.  This will cause a surge of demand from students through the summer, meaning that landlords will likely begin to raise prices and remove incentives. 

 

As remote learning winds down, it will provide a much needed injection of demand in areas like South End and Fenway, but it won’t bring them back to pre-COVID numbers on its own.  The international travel restrictions are still in place, which presents a big obstacle for our international student population being restored.  In addition, remote work will not scale down as quickly, and will likely never be fully phased out.

 

So it’s fair to predict that not all of the professionals who fled the city last year will be moving back to Boston’s Downtown neighborhoods in 2021.  The question is how many will move back?  Also, will the vaccine ease the public’s perception of the virus to the extent they’d be willing to live in a densely populated city center?  Only time will tell, but we’re certain that the supply issues in South End will steadily improve throughout 2021.  We will continue to monitor and report on this data as the situation develops. 

Comments (4)

Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Thanks for sharing this valuable information for the South End Apartments Zachary! 

Apr 09, 2021 09:22 AM
Zachary Parker

Thank you Joan

Apr 12, 2021 08:31 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

Buyers & sellers interested in apartments in the South End area would benefit from your services Zachary. Have a great day!

Apr 09, 2021 02:48 PM
Zachary Parker
ProSource Media - Boca Raton, FL
Real Estate Journalist

Thank you Debe!

Apr 12, 2021 08:32 AM