Meagher notes that the area north of the city is of particular concern as three contiguous markets there have a quarter of all the properties that are currently in the pipeline. Specifically, the near north market has 7,300 units in development. The Cambridge market has the next highest total in development with 5,740 units and the Route 128 north market has the third highest total in development with 4,939 units.
"In the short term, from a tenant's perspective this is very good," says Meagher, "but for a property owner this is not so good."
Meagher emphasizes that the Boston area's job market has a symbiotic relationship with the housing market. "When businesses don't do well, the apartment market dries up, but when businesses are doing well they can't get enough people to work for them because of the dearth of available apartments," he says.
This fact and the reality that it takes years--between permitting and construction--to actually get a project built makes developers a "breed that have to believe," according to Meagher. He adds that the current pipeline could be good news if the economy is on an upswing because there will be housing for potential workers. "Boston is one of the most expensive places to live," he says. "More housing makes us more competitive."
Meagher says that according to his most recent figures, as of last month average rents in the greater Boston area have gone down a little more than 2% since last August, a decrease that he terms fairly significant. In that same time period occupancy rates in the area have gone from 94.6% to 95.1%. Interestingly, condo sales have seen a 6% increase in selling price, but a 19% increase in units sold.
"The bottom line is it is good news for the state that developers have responded to the need for housing by putting into the pipeline a massive amount of housing," says Meagher. "It will make the city more competitive and improve its quality of life."
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