‘There’s hundreds and hundreds of vacancies’ Renters are in the driver’s seat in this soft rental market.
Boston Sunday Globe Article featuring Broker, Hillary Birch
By Jon Gorey Globe Correspondent, Updated November 29, 2020
It’s been a while since renters have had the upper hand in Boston. But in a market that’s largely tied to the academic calendar, a drop-off in college students — thousands of whom didn’t return to campus this fall due to the pandemic — has led to staggering vacancy rates across the city.
“There’s hundreds and hundreds of vacancies,” said Stephen Visco, team leader at RTN Realty Advisors in Brookline. “It’s the worst I’ve ever seen, and I’ve been doing this for 18 years.”
Nearly 7.2 percent of apartments in Boston were sitting vacant on Nov. 22, according to Boston Pads, a real estate technology platform that tracks local sales and rental data. That’s more than a five-fold increase over a year ago, when the vacancy rate sat at 1.32 percent.
Vacancy rates were even higher right after Sept. 1, the unofficial New Year of the local rental calendar, peaking at 9.17 percent the next day in Boston. It wasn’t just the lack of returning students, Visco said. While most tenants have kept up with rent payments through the pandemic, “a lot of people who lost their jobs just ended up moving home and not renewing their lease,” he said.
Landlords have been making concessions to fill those unrented units, covering the much-hated broker’s fee and slashing rents. “They’ve decreased their rents by like 20 percent from what they were a year ago,” Visco said. “I mean, they’re just scrambling to get these places rented.”
And when you combine a surge in pet adoptions this year with a glut of vacant apartments, many landlords are getting more flexible about allowing cats and dogs. “I’ve had three places that changed their position on having a pet,” Visco said,
“because they wanted to get it filled.”
Visco said studios and one- and two-bedroom apartments are still renting at a pretty good clip. “The ones that are really tough to move are the bigger three- and four- bedrooms,” he said, because most people aren’t eager to share space with roommates right now. “You’re not going to be moving in with three or four of your buddies during a pandemic.”
For example, in Brighton’s Oak Square neighborhood, Visco said, “You can get a three- bedroom right now for $2,000 to $2,100 a month versus, back in the day, looking at $2,500 to $2,600.” That’s for an average unit in an older home, Visco noted. New construction and luxury buildings aren’t necessarily dropping rents, he added, but are instead offering two or three months of free rent with no broker’s fee.
Outside the city, rents and vacancies have been a bit more stable — a trend that rental website Apartment List has found replicated across the country. With the pandemic shutting down much of what makes city life attractive, “many renters today are questioning whether it still makes sense to pay a premium for city living,” said Rob Warnock, Apartment List research associate.
Indeed, while the median September rent in Boston dropped 8 percent year over year, according to Apartment List data, and Cambridge saw a 10 percent drop, median rents in Quincy, Framingham, and Waltham were more or less unchanged — and rents in Weymouth actually rose 4 percent.
“Overall, the Quincy-Weymouth area has remained pretty stable,” said Hillary Birch, owner and broker at 3A Realty Group in Quincy. As with the sales market, where home buyers have been seeking more space outside the city, there’s been a similar
flow of renters leaving Boston. “It’s been the same in rentals; I think people are definitely looking for a little bit more space,” Birch said.
Still, even suburban landlords are being more flexible than in the past. “Rents are maybe down a little bit because owners are having to make some concessions in order to keep their units occupied or to maintain the tenants that they currently have,” Birch said. For example, some of her clients are waiving security deposits or allowing small dogs or cats when they ordinarily wouldn’t entertain the idea of pets.
And outside the city, where tenants are more likely to pay for their own heat and hot water, “owners are a little bit nervous to have a vacancy during heating season,” Birch added. That’s making landlords a bit more open to negotiation on rent. “Or I have landlords that maybe aren’t being as stringent about the application — where the credit isn’t perfect, but they’re open to the conversation if the person has steady income.”
Visco said landlords across the board are feeling the impact of a soft rental market, from big management companies to “mom and pop” owners. “Even in Newton, Watertown, Brighton, there’s still a ton of vacancies,” he said, though buildings closer to downtown and near colleges have been hit the hardest. From Commonwealth Avenue to Harvard Square to the Fenway, apartments that ordinarily get filled up by incoming students still have hundreds of vacancies.
A recent search for Cambridge apartments on Zillow.com yielded more than 700 available units, for example, hundreds of which had been listed for 30 days or more — a seldom seen supply. A similar search in Somerville produced almost 600 results. “Typically in Somerville or Cambridge, those are hot places to live, everybody wants to live there,” Visco said. “So you never see that many vacancies.”
Visco has been advising his mom-and-pop landlords, who typically operate on thinner margins than big apartment complexes, to price their rents low enough to fill any empty units. “We’re in a city, there’s always people moving, but there’s so much competition out there,” he said. “You’re better off filling it at a lower rent to get people in there than having it sit vacant.”
Birch has encouraged landlords to be more flexible not just with new applicants, but with existing tenants as well, given the economic hardships many of them are facing. “Most renters are doing their best to stay on top of their payments, they’re just maybe taking a little bit more time to get the whole rent paid,” she said. “But I always tell my landlords, it’s better to have a tenant that’s paying a little bit late than a tenant not paying at all.”
It all adds up to this: “Right now, renters are in the driver’s seat,” Visco said. Conditions are so favorable, in fact, that it could be worth locking in a lease for longer than a year, if a landlord is open to it.
“If you can negotiate locking into a lease ending in August of 2022, you’d want to do that now,” he said. “It’s a renter’s market, and you’re going to get a deal.”