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Is the sharp rise in Boston rents just a pandemic correction?

Renting
Rents have shot up across the United States, increasing 17.8% over the past year. Adobe Stock

Boston rents are up 0.3% since January and more than 25.7% compared with this time last year, according to Apartment List’s February Rent Report

Though the 0.3% increase is nothing especially noteworthy, the year-over-year jump is anything but typical and “pretty staggering,” said Chris Salviati, a senior housing economist with the listing site. 

This rapid rise isn’t unique to Boston. Rents have shot up across the United States, increasing 17.8% over the past year as cities across the country bounce back from the pandemic. 

Indeed, the pandemic may be mostly to blame for the sudden increase.

“The fast growth that we saw in 2021 was mostly making up for lost ground over the course of 2020,” Salviati said. The year “2020 saw a pretty sharp decline in rents in Boston, so even though we saw really rapid growth last year, that was basically just catching up to the pre-pandemic baseline. Right now, our median rent estimate for Boston is just half a percent above where it was in March 2020.” 

There are other factors at play, however.

In a report the Harvard Joint Center for Housing Studies released Tuesday, writer Whitney Airgood-Obrycki noted that “higher-quality apartments led the way” on price increases.

Salviati blames low vacancy rates, noting that rents are rising in places even where they had not fallen during 2020. “A lot of people are competing for a small number of available units, so that’s bringing along these price increases,” he said. 

Harvard, using data from analytics firm CoStar, found that by the third quarter of 2021, the vacancy rate was 4.6% — “far below pre-pandemic levels and the lowest rate in data back to the early 2000s” — and the drop was particularly acute in urban areas that saw a spike during the early months of the pandemic. The report also noted that the number of renter households increased by 870,000-plus in the third quarter of 2021, with the increase in overall demand coming “overwhelmingly from higher-income households.”

And don’t forget the prospective home buyers who were edged out of the market by record-high prices.

“Things obviously have been going crazy with for-sale housing prices, so I think there are folks that potentially would be first-time homebuyers, but maybe aren’t able to find anything that matches their preferences and budget, so they will remain on the rental market a little longer,” Salviati said. 

According to data from Boston Pads, vacancies and availability are still well below where they were pre-pandemic, and prices for four- and five-bedroom apartments have climbed more than $100 in the past month. 

Though Boston’s year-over-year rent growth was above the national average, it was only the 17th biggest increase. Here are the 20 cities that saw the biggest jumps and slowest growth, according to the Apartment List report:

apartment-list-rent-growth-chart

Boston may not have led the pack as far as increases, but its median rental price remains among the highest in the country, nipping at the heels of the nation’s perennial No. 2, San Francisco (which follows New York City, of course). A report from Zumper found that Boston’s median one-bedroom rent of $2,720 is a mere $130 behind San Francisco’s, a gap that was a comfortable $1,300 in 2019. Here are the 10 cities with the highest median prices for a one-bedroom: 

  1. New York City: $3,260
  2. San Francisco: $2,850
  3. Boston: $2,720
  4. San Jose: $2,390
  5. Miami: $2,340
  6. Washington, D.C.: $2,250
  7. Los Angeles: $2,220
  8. Oakland: $2,100
  9. San Diego: $2,070
  10. Fort Lauderdale: $1,940

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