Low vacancies and rising rents have landlords sitting pretty.
Thomas Grillo
Real Estate Editor- Boston Business Journal
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The economy may not be booming in every sector yet, but try telling that to Greater Boston landlords.
Rents in Boston, Cambridge, Somerville and Brookline have increased at a pace not seen in four years, according to Reis (Nasdaq: REIS), a New York-based real estate market tracker.
The average monthly rent in the Boston area reached $1,825 in the fourth quarter, up from $1,772 for the same period in 2011, a 3 percent increase. The region saw its biggest increase last year since rents rose by 3.7 percent in 2008. In downtown Boston, asking rents increased by 3.2 percent to $2,861 a month from October through December, up from $2,745 at the end of 2011. That essentially doubled the pace of growth in the U.S. Consumer Price Index, which increased 1.7 percent in the past year.
At the same time, apartment vacancy rates are shrinking. Vacancies fell to 3.6 percent in the fourth quarter from 4 percent a year ago. In downtown Boston, vacancies were even tighter at 3.2 percent, falling from 3.4 percent at the close of 2011.
“It’s a simple rule of supply and demand” said Harold Brown, CEO of the Hamilton Co., one of the Hub’s largest landlords. “The two biggest drivers pushing rents are big demand and the lack of supply. Those factors are creating a perfect storm for landlords.”
For more on surging rents, check out “Greater Boston landlords see rising fortunes” (premium content).
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