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3 New England cities led the nation in rent increases
Experts attribute jumps to workforce changes, a lack of supply, condo conversion, student demand, and more.
Looking to rent an apartment, condominium or single-family home? Well, prepare yourself for sticker shock. A new report found that renters in three markets in New England are dealing with rent spikes, including Springfield, which topped the January rankings nationally with a year-over-year rent increase of 14.73%.
According to the Waller Weeks & Johnson Rental Index, Springfield, which has an average rent of $1,615, saw the highest increase of the 100 markets analyzed. The rental markets in New Haven and Worcester were also in the top 10, with increases of 10.59% and 10.27%, respectively. Other markets in the top 10 include Cape Coral, Fla.; Akron, Ohio; Knoxville, Tenn.; El Paso; Charleston, S.C.; Louisville, Ky.; and Albuquerque.
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Boston ranked 37th with a 7.55% increase, Providence came in 25th with an 8.55% jump.
“This is the first time those three New England markets have cracked the top 10,” said Ken H. Johnson, a housing economist at Florida Atlantic University’s College of Business. “It was a little shocking.”
Johnson attributes the increases to back-to-work mandates from employers, which are drawing people back from their remote offices into employment centers. “You can’t commute from West Palm Beach to Boston,” he said. “If you have to go back to the office on a regular basis, you need to move back.”
That’s creating stronger demand for an already limited pool of rental properties, he said, and giving landlords more freedom to raise rents.
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“The rental market is very high across Massachusetts,” said Eric Rollo, managing partner and broker of The Agency in Boston.
Rollo said there’s a lack of rental housing in Massachusetts because many owners are converting their properties to short-term rentals. Plus, the Springfield, New Haven, and Worcester markets in particular are home to numerous colleges, so there’s demand for student housing. Condo conversions are also putting pressure on the rental market, as multifamily buildings are converted and rental units removed from the available supply.
“It’s a tough market,” Rollo said. He said one of his agents owns an 800-square-foot, one-bedroom on Cape Cod. He received 34 applications and expects the unit to rent for much more than the $1,400 asking price.
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