Tuesday, October 30, 2018

Why Boston Remains one of the Most Expensive Places to Rent a One-Bedroom

New reports show that Boston's median rent for a one-bedroom apartment is $2,340 per month, making it one of the most expensive places in the United States to rent a one-bedroom. Boston ranks as the fourth most expensive city to rent a one-bedroom apartment, trailing just behind San Francisco ($3,500 per month), New York ($2,900 per month), and San Jose ($2,550 per month). Nationally, the median price for a one-bedroom is just $1,208 per month.

Boston's sales market also remains one of the most expensive in the nation. The median asking price for condos in the city both run well over $500,000. In several neighborhoods, it's not unusual to see asking prices averaging for more than $1,000 per square foot. 

There are multiple reasons for Boston's extraordinarily high price points, starting with high barriers to entry in the sales markets surrounding Boston. Neighboring cities including Cambridge, Brookline, and Somerville also command consistently high prices. Furthermore, Boston is full of wealthy tenants with money to spend. Although the city boasts a large share of rent-burdened households (where tenants pay at least 30 percent of their income in rent), Boston also has a sizable proportion of residents who find $2,500 a month for a one-bedroom not a big deal.

Another reason for Boston's high rents, are the tight inventory of apartments. Boston is home to more than 30 universities, colleges, and community colleges. Despite apartment construction booming in recent years, it's still not enough to satisfy the demand. Furthermore, the horrible commutes in and out of Boston have worsened over the year, raising the demand to live directly in the city. The proportion of Boston-area commuters who travel more than 90 minutes to and from work has increased a whopping 50.1% from 2005 to 2016.

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