As realtors, Todd and I both hear all the time why rental prices seem to increase every year. This rental season is no different. Take an ordinary one bedroom on Commonwealth Avenue in Allston near the Harvard Avenue T-stop. Crappy appliances from the 1980's, hardwood floors, heat and hot water included, mice, and a shower that doesn't seem to work during the coldest parts of the winter. Like I said, an ordinary Allston apartment that should be priced at $1000 per month, maybe $1150. This rental season, the same apartment will cost you $1550-$1600. I kid you not. $1600 for a broom closest with a horrible view of the T and bad lighting.
The Boston rental market may be transforming into its expensive neighboring city, New York. New York has obscenely high rent due to never-ending consumer demand and the city being home to some of the hottest corporations (and the banking industry let's not forget). Boston is now enduring the same fate, but it's a good thing. As quoted from the Portland Press Herald, "Boston's real estate market, often overshadowed by the skyscrapers of New York and government-fueled growth in Washington, is seeing a boom in construction as developers financed with cheap debt seek to profit from a growing work force of educated young adults and strength in the technology and life-sciences industries."
Think about it. Boston has the most universities in the world and some of the brightest young minds from probably hundreds of countries. We have booming technology firms, high living standards, and an ever-competitive job market. Everywhere I seem to go in Boston is filled with expensive foreign cars and everyone (it seems anyway) on their I-phones. On the flip-side, why shouldn't landlords and property management companies try and take advantage of this. Wouldn't you? No matter how bad an apartment is throughout Boston, it will get rented. Guaranteed. The money and the demand (no matter how weak it may be) is there. Since landlords and property management companies know this, raising the rent doesn't seem so awful to them. Boston's student population/future work force is also expanding, which is also affecting landlord and property management company's mind. Our alumni, BU, has seen enrollment increase by a decent percentage since we started there in 2007. In the future, I would not be surprised if we see that ordinary Allston one bedroom apartment priced at $2000 in a couple years. It could happen.
This is just some food for thought for anyone beginning the rental process this season. I am not trying to scare anyone, just give some friendly advice. Trust your realtor as well. We are trying to find the best possible apartment for our clients. If we tell you the rental market is bad this year and the deals you could find last year aren't available anymore, well, trust us. Also, if your looking for landlords to pay a portion, if not all, of the broker's fee, your going to be in for a rude surprise. If you ever want rental advice, send me an email: firstname.lastname@example.org. I am always here to help and find the best possible homes for my clients.