Watch Anthony on Fox 25 News On Where You Can Find Affordable Places to Rent
Related blog: Why Are Boston Rents So High?
Singing about money that rubs it in doesn’t it? Rents are on the rise around Boston why is that and more importantly, where is it still affordable? Here to help us map it all out is Anthony Lamacchia of Lamacchia Realty nice to see you.
Nice to see you too thanks for having me.
You know we always hear this advice that we’re supposed to spend at most a third of your paycheck on your rent–
Or your mortgage
Exactly but we’ve got this new report from Trulia so I want to show everybody out there the breakdown a little bit if you’re renting a 2 bedroom in Boston it’s $2300 a month and the percentage of the average wage that you’re spending on that here in Boston is 43% compared to other cities, San Francisco, 51%, Miami 62%, I thought we had it here in Boston but comparatively,
Right and some cities are getting worse. Now 43% in my opinion is too high, now keep in mind that is based on the average wage, so that doesn’t mean average wage is key, that doesn’t mean every single person is spending that much, anytime you get over 40%, you’re taking a risk and that’s a lot it’s harder to save.
It certainly is and when you and when you think about where you actually live it’s simply a lot of people need to live in the city of Boston itself I feel like I should put a big money sign here. So then you’ve got these areas around here south to Quincy, north to Medford, and you’re also looking at Watertown, I know it’s your hometown, and of course it’s on the map for a lot of us after everything that’s happened there, a lot of new construction in Watertown.
There is new construction for apartments, there’s over 700 apartments coming on the market between now and the end of the year. So with that additional supply I think you’ll see rents stop going up there but they’re about 1900 a month, and Medford was about the same thing, and Quincy was actually a little bit more affordable.
Now two things to point out about in these areas as far as attractiveness to the city why they’re an actual option who like that city living.
Proximity to Boston, in Boston people are going to spend more on rent almost everywhere, not everywhere but just about these are all places you can get into the city in under 15 minutes.
Without a car too I think that’s key for a lot of people who want that city life
Yes great commuter locations MBTA has multiple ways to get into the city
OK, so question for you then, are we ever going to see rents go back down in Boston proper and why do they keep going up across the board?
Well this is not just a Boston impact that is happening here, it’s national, and the reason is homeownership. When homeownership rates were in the high 60s, 68% or 67% back in ‘04 and ’05 then there was more home owners, less renters, and rents went down. That’s changed. The market crashed and people got out of homeownership and got into renting, many many more people. The homeownership rate now is down to the lowest level since 1995. So what happens?
Supply and demand.
That’s all it comes down to. I think two things are going to happen over the next few years: One, there’s going to be more supply, as I mentioned what’s happening in Watertown that’s a sample of what’s going on nationally, not only in Boston but all over.
New construction for apartments. Investors saw developers saw rents go up so what do they do? Let’s build apartments. So a more supply is coming on the market, more supply comes on
Prices go down, that’s great.
Another thing that’s going to happen, people who got out of homeownership and into renting will get back into homeownership. So I’m willing to bet that right now we’re at the homeownership low, right now we’re at 63%, we’ll see that go back up over the next few years and as it does, I’m willing to bet rental prices will go back down, I don’t think they are going to collapse.
They are probably hoping that comes true. Thank you so much!
All right, Anthony Lamacchia from Lamacchia Realty thank you so much.
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