Multi-Housing News - September 2008 - (Page 24)

market report Beantown Market Still Simmers Boston’s real estate cycle often precedes other metros By Patrick J. Leblanc, Sperry Van Ness Comvest Realty Greater Boston has historically been a strong rental market with limited supply, a youthful demographic in this popular college town and job-changing professionals who typically rent. But a strained economy reflecting national trends and local supply increases has changed market conditions. The Boston development pipeline remains strong, with projects conceived during the boom of 2005-2007 coming online in 2008 and 2009. Reis reports 4,429 rental units completed in 2007, and 1,555 rental units completed in the first half of 2008. In addition, Reis reports 2,633 condo units came online in 2007, with 450 more condos to date in 2008. Significant completions in the first half of 2008 are the 426-unit Archstone North Point, the 312unit Archstone CambridgePark Phase 1 and the 310-unit West End Residences at Emerson Place. Local property managers managing Class B multifamily properties are reporting strong prospective tenant traffic with stories of couples who can’t afford to buy and prospective residents who are renting homes that are being foreclosed upon. For example, one well-managed property on the North Shore reports a 98 percent occupancy rate, strong foot traffic since spring and particularly strong traffic for the past several weeks. Economic drivers While Massachusetts has seen an increase in unemployment rates, the greater Boston area has also seen an increase in employment, with increasing job growth in 2005, 2006 and 2007. Total nonfarm employment in Massachusetts has been slowly increasing every month from November 2007 through June 2008, from 3,315.8 thousand to 3,335.4 thousand jobs. The Bureau of Labor Statistics reports that, as of June 2008, Massachusetts total nonagricultural employment was at 3,295.3 thousand jobs, an increase of 1.1 percent over the prior month, versus a national decrease of 0.5 percent for the same period. Massachusetts unemployment for June 2008 was 5.2 percent, an increase of 0.3 percent over the prior month. By comparison, the U.S. unemployment rate was 5.5 percent for June 2008. The greater Boston area economy is fairly diversified. Primary drivers are education, technology, biotechnology, health services, financial services and professional service sectors. Gains in biotechnology and health services have offset weaknesses in construction and retail. Build-out of the traditional hubs of Longwood and East Cambridge has companies looking to other areas of Boston and the suburbs for growth. The Boston Business Journal Vacancy Rate Trends and Forecast 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 2004 2005 2006 2007 2008 2009 2010 2011 2012 US Boston Northeast The Clarendon, a 33-story classically elegant luxury residential tower now being built in Boston’s Back Bay, is a joint venture between Related Companies of New York and The Beal Companies of Boston. The Clarendon is expected to be completed in late 2009. Rendering by Neoscape. 24 September 2008 | Multi-Housing News | Producer of Multi-Housing World

Table of Contents for the Digital Edition of Multi-Housing News - September 2008

Multi-Housing News - September 2008
Contents
Calendar of Events
From the Editor
Executive Insight
Property Management: Growth Plans
Development & Design: Low-Rise Trends
Market Pulse
Special Report: Green Design Makes 'Cents'
Market Report: Boston
Top Architects List
Finance: HUD
Products: Cabinetry
Tech Report: Internet Listing Services
NMHC Notebook
Property Showcase: Fitness Center

Multi-Housing News - September 2008