Q1 2025 Boston Multifamily Market Report
Boston Multifamily Market Overview
Boston’s multifamily sector recorded stable absorption activity from the end of 2024 into the first quarter of 2025. The stability can be attributed to the influx of new residents needing to rent, with population gains surpassing the national level. Residents are attracted to Boston for its variety of employers, as well as the various educational opportunities the market boasts. With demand expected to continue, Boston is projected to maintain stable multifamily performance and record an uptick in rent growth.
Highlights
- Boston is outperforming U.S. levels with both its vacancy rate and rent growth level.
- Private investments continue to make up the greatest number of sales across Boston.
- With stable rent growth around 3.0% for the entire metro, investors will continue to be attracted to Boston.
- Class A properties accounted for the most sales in Q1 2025.
Rents | Vacancy | Construction
Boston recorded around 7,000 units absorbed over the past 12 months. The 495 South submarket accounts for one of the highest absorption levels, with 4% of its inventory absorbed during this timeframe. With the growing number of residents taking up units, Boston’s vacancy rate of 5.4% is outperforming the national rate of 8.0%. Rent growth in Boston is also outranking national activity, with rent growth at 2.3% compared to the U.S. rate of 1.1%. Boston rents have increased the most in northern suburbs.
Construction levels have begun to decrease, with 7,300 units added in 2024. Currently, the metro has about 15,000 units on the way, which makes up 5.3% of its inventory. Almost half of the units under construction will be delivered in the Everett/Malden/Medford/Melrose, Route 1 North, 93 North, and Somerville/Charlestown submarkets. Boston’s previous construction activity was aimed at adding higher-tier units, but now more lower-tier properties are being added to the metro’s supply. Around 30% of the supply wave is for this segment, due to increased demand from residents renting in this sector.
New residents are aiding the market, recording stable vacancy at 5.4%.
Boston Multifamily Transactions
Boston recorded a total of $4.2 billion in sales over the past 12 months, which increased from the $3.4 billion level in 2023. First quarter sales momentum dropped from, sales dropped from year-end 2024 levels, but remained over $500 million. The majority of sales in Q1 2025 were for Class A properties. The largest transaction was for Altitude Apartments, which is made up of 919 units, and sold for $268 million. Due to strong fundamentals, both sale prices and cap rates are forecasted to increase for the rest of the year.
Q125 Total Sales Volume: $925.3M
