After this incredibly busy September rental season, one thing has become clear to brokers specializing in rentals – inventory is low. Or maybe, demand is just high. We did see a larger-than-average influx of students into Boston’s competitive rental market this year. And with a disconnect between market value and seller prices, with the resulting decline in sales inventory – purchasing a home in Boston is paradoxically more difficult these days. Making renting an apartment even more competitive.

That could change, in the future, however. One nice side effect of increased demand and insufficient supply is that people with real money sit up and take notice when hundreds of people flood the city, begging them to give them thousands of dollars, and they have to say “no”. If they were comfortable with that circumstance, they wouldn’t be as successful as they are, after all. And they’re taking action to ensure that they will not have to say “no” much longer.

So what are they doing?

Let’s start right next door to my office. This summer I had a great time finding parking on Brainerd Road every day, what with the wrecking equipment demolishing the run-down auto-shop building next door, followed by the usual progression of debris and soil on their way out, building materials on their way in, and cranes taking up the entire block as they lift steel beams into place. What’s it all for? New luxury highrise, here we come. Our contacts with the developer Mt. Vernon Company tell us we should expect roughly 100 high-quality units, one and two bedrooms. Based on the market and estimated quality of the units and building amenities, we expect these will come out for around $2000 for the one bedrooms and around $2600 for the two bedrooms. We’re hoping this project will be completed in time for September 2012 move-ins! Please let us know if you’d like to get on the waiting list!

Rendering of proposed building on 60-66 Brainerd Rd (Mount Vernon Co., Prellwitz Chilinski Assoc., BRA)

Mt. Vernon has also submitted a proposal for an additional 79 loft-style units to be built across the street from that project, displacing the warehouse that currently occupies that spot. The 1.2 acre site straddles the Allston-Brookline border, though the address of the property will be on Brainerd Road in Allston. The proposal is expected to be approved, and construction is estimated for completion in time for the September 2013 rental season.

On another front, Harvard University’s Allston Work Team recently gained approval for their two-stage plan for future developments in Allston. Stage one of the plan includes plans for new residences and retail outlets on Barry’s Corner, a new Health and Life Sciences center on Western Ave, and a desperately needed revamping of the existing Charlesview Apartments complex. The second stage will include development of Harvard’s new 36-acre Enterprise Research Campus on Allston Landing North, which may include a hotel and conference center reminiscent of Kendall Square. Harvard is currently in discussion with co-developers on plans to make housing available both to students and on the general market. Construction is planned to begin in 2013.

Artist rendering of the planned new Charlesview Residences complex (The Community Builders, Inc.)

The existing Charlesview Apartments complex on Barry’s Corner (which Harvard will take over for their project discussed above) will be replaced by a new sprawling Charlesview Residences complex being built on the former Brighton Mills Shopping Center in Allston.  The existing 213 units on Barry’s Corner will be replaced by 340 units which will include a wide range of apartment sizes and types, from one bedroom flats to four bedroom townhouses. The redevelopment plan also includes new streets and parks, facilities for community use, commercial space, and an underground parking garage that will accomodate up to 243 vehicles. The design has been carefully created to avoid regurgitating the community objections towards the previous development in the 1970’s, which residents criticized as an eyesore. The development has been designed to blend seamlessly into the community and stimulate the neighborhood. The unusual project has attracted a variety of non-traditional corporate investors, including most notably Google, Inc.

Moving into town, there are also several urban luxury towers pushing up new spots in the cityscape. AvalonBay Communities started construction last month on tevalon Exeter, located on the Back Bay’s Exeter Street. Avalon Exeter will add 187 new luxury units to the Prudential Center complex in the form of a new 28-story glass tower right next to the Lenox Hotel. Units will carry a wide array of sizes and prices. The 32 studios will start at around $1800, the 52 one-bedrooms will start at $2500, and the 83 two bedrooms will start at $3500. There will also be 20 penthouse apartments whose prices are yet to be determined. AvalonBay Communities also recently submitted a proposal for a 29-story residential tower on Stuart Street in Boston, to provide 404 luxury apartments of varying sizes and roughly 200 indoor parking spaces.

Downtown, a variety of new projects are proposed. Hayward Place will add 265 new apartments across from the Paramount Theatre. Another as-yet-unnamed development on Hudson Street will bring 345 units to Chinatown. Chinatown may also see another 381 units in the new Kensington Place development on Washington Street. And the Charles River Park complex plans to add another 500 units near the Boston Garden.

These new developments are exciting, especially amidst the miasma of a stagnant economy. With high jobless rates, new construction projects should find zoning and permit agencies friendly and accommodating, and with the rental season we’ve just seen, we can expect construction contracts to treat time as a valuable commodity. The real estate market is about to be injected with a large quantity of interesting new listings on the high end of the spectrum – we can’t wait to see what that does to the market as a whole!

Many people will say that now is the time to buy, and they would be correct.  Fewer people will say that now is the time rent, and they would be correct as well.  We’ve written a little bit more about the home buying aspect as of late, so now we’ll try and go into how much rents have decreased, why they have declined, and what the recovery looks like.

In 2009 rental reductions averaged 5.8% nationwide.  There are many markets that have not seen a decrease at all, while other have decreased well into the double digits percentage points.

2009 was not the best year for our economy.  Many factors helped the rental market stay strong and not completely and totally die.  In 2009 many borrowers foreclosed on their home, forcing them into a rental situation.  Many people were forced into a roommate situation, or increased roommate situation.  The largest rental age group, 20-34, increased and is expected to increase by about 5 million people over the next 10 years.  Also there was not a gross over building problem in the rental market, or at least as much as there was on the sales side of real estate.  Even with the economy taking a turn for the worse, these factors kept the average decline below the double digits.

As jobs are created and the economy strengthens, many things will change.  Roommate situations will decrease, family members will move back into rental units,  and the demand for rentals will begin to grow again.  Currently vacancy rates are estimated at about 8.8%, and will drop to about 6% between 2011 and 2013.

What should you do about this?  If you know you will be in Boston for more than the next year, you should find your next apartment or resign your lease as soon as possible, before the market begins to fix itself.  5 months from now (when most will make a move if they are going to move in 2010) the market can have a completely and totally different landscape.  Rents may start to increase, and as apartments are taken off the market, demand for the remaining apartments will increase and drive cost up, or keep pricing stagnant.

In order to get the best deal and most effectively negotiate your rent you should first do some research, find out what similar apartments in same neighborhood are renting for.  What is the vacancy rate in that area?.  Decide what you need in an apartment and what you want.  Are you able to sign more than a one year lease?

Although you want to find the apartment of your dreams, many times that does not match up with your financial situation.  Finding an apartment at the right price may come along with a compromise.  You may need to agree on a longer lease term, or pay several months up front.  If you’re unable to secure a rent as low as you would like, many landlords are willing to partially renovate, reduce move in costs such as security deposit and last months rent, or make some other consolation to prevent their property from being vacant an additional month.

Do you have any tips for renters from your experience?  What are some best practices for negotiating a deal on your next apartment?

As always you can contact us at info@ProperRealtyGroup.com with any questions or concerns.  Having an experienced real estate professional on your side will enable you to secure the best apartment at the best price!