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Boston’s multifamily market remains resilient and continues to attract capital as we enter 2025.

The market weathered slower job growth earlier in 2024, though momentum has picked up over the past two quarters. According to Moody’s, Q4 2024 vacancies stood at 6.5%. Strong absorption of new inventory, supported by the region’s stable local economy and improving job market, has driven the metro area’s most robust growth in many years.

Some Boston multifamily property owners have increased concessions on newer properties, causing rents in certain areas to flatten or decrease slightly, said Robert Keenan, Regional Sales Manager at Chase. 

But Boston real estate trends show Class B and C multifamily properties are faring better than luxury properties. Asking rents for Class B and C properties rose 1.1% year over year in Q4, compared to 0.5% for Class A, according to Moody’s.

   

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Sustained demand for Boston apartments isn’t surprising when you consider the long-term view, Keenan said.

“Boston’s high home price-to-income ratio, combined with its outsized college and university student pipeline, make it uniquely positioned for long-term growth in the multifamily sector,” Keenan said. “This dynamic workforce has allowed Boston’s economy to diversify and thrive, which supports strong demand for rental housing and positions the city and the multifamily housing sector for sustainable growth.” 

Blending home and office

While workplace arrangements continue to evolve, property owners are focusing on amenities that enhance overall resident experience.

Modern amenities, such as package delivery facilities and enhanced meeting spaces, are becoming increasingly common, he said.

Higher-for-longer interest rates

The future of interest rates is uncertain as the Federal Reserve supports its goals of maximum employment and stable prices.

High rates have pushed Boston cap rates up slightly, largely due to increased borrowing costs, Keenan said. However, the market retains core strengths attractive to investors with a long-term view.

That’s in part due to the city’s universities and colleges and highly educated workforce. Slightly more than half of Boston metro area adults have at least a bachelor’s degree, compared with 36.2% nationwide, according to the U.S. Census Bureau. 

“These solid market conditions supported relatively vibrant investment sales activity,” Keenan said. The total asset sales volume was $2 billion in 2024, according to Moody’s data.

“Demand for existing assets remains strong, as the Boston metro economy continues to attract consistent corporate investment and create jobs,” he said. 

Investors seeking to acquire or refinance apartment properties in today’s rate environment may want to explore options that provide flexibility for any future interest rate relief.

“Boston’s high home price-to-income ratio, combined with its outsized college and university student pipeline, make it uniquely positioned for long-term growth in the multifamily sector.” 

Keep an eye on transit hubs

“The recent court ruling in support of the MBTA Communities Act will support the continued delivery of multifamily housing within the Boston metro,” Keenan said. “Developers may move at a measured pace as they try to balance building costs with demand in neighborhoods that traditionally don’t have multifamily housing.”

Easy access to public transit is often in high demand, and not just within the multifamily sector. Employers also value commuter-friendly locations. 

“Competition with biotech developers for sites near public transit has diminished,” Keenan said. “Multifamily developers with longer investment horizons may want to consider opportunities to take advantage of a lull in life-sciences development.”

Whether you’re ready for financing or looking to streamline your operations, reach out to our Boston lending, payments and liquidity team.

JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.

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