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Soaring rents sign of apartment market bubble?

Posted by Scott Van Voorhis April 13, 2011 08:21 AM

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Ah, the good old days. When you could get a bargain on a decent apartment and gloat while your friends grappled with Greater Boston's perpetually inflated home prices.

No more. After years of quietly riding out the real estate storm, renters across the Boston area are suddenly finding themselves in the midst of what could be the area's newest real estate bubble.

While home prices have started falling again in many towns and cities across the state, apartment rents have been on a tear.

Boston just barely missed the top 10 markets in the country in terms of rent increases - it ranks No. 12 in a list compiled by Bloomberg Businessweek.

Rents across the Greater Boston are on track to jump another 6.2 percent by the end of 2011, according to AXIOMetrics.

That's atop of last year's 7 percent increase, which pushed the area's average rent to $1,638.

And the market is getting a lot tighter as well - vacancy plunged to 4.4 percent last year from nearly 6 percent back in 2009.

Renters, are you feeling the heat yet? And are we headed for another real estate bubble, this time with apartments?

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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