2021 Boston Housing and Multifamily Outlook

[Zachary Parker]

The Bay State lost residents for the first time in 2019, but the Boston Metro region is still growing.  Last year marked a divergent year for the housing market in Massachusetts, as the apartment rental market in Boston stalled and median home prices grew amid a shortage of single-family homes for sale.  Demand also shifted away from the dense urban neighborhoods in Boston towards the suburbs.  The vacancy rate soared to over 9% in September 2020 in the City of Boston, mainly due to remote learning, causing rent prices to come down 5-20%.  Since schools announced the return of students for Fall 2021, the market has corrected and the vacancy rate is down to a much more manageable 2.3%.  Still, Boston multifamily investment in 2020 was down 60% compared to 2019 amid rent challenges and demand shift.  Will the multifamily market return with Boston's students in 2021?  How will the zoning board handle the increase in demand for affordable housing in the suburbs?