Boston's overheated luxury rental market may finally be headed for a correction.
So says John Ford. Owner of downtown Boston brokerage by the same name, Ford's Boston Real Estate Blog offers an insightful and independent take on the city's real estate market.
"There could be a correction in the luxury apartment market this year," Ford noted when I called him last week. "There are too many luxury apartments and I don't see that changing in the near future."
(You can find the quote in my B&T column that just appeared today, where I tackle the luxury apartment overload in depth.)
So why the concern?
First, there's just an incredible number of luxury apartments either having just hit the market or about to come on. We are talking thousands of units, sporting $3,000 studios, $6,000 two-bedrooms and $11,000 and $12,000 penthouses.
The 26-story Radian Boston, on the edge of Chinatown near South Station, is the latest to hit the block,
It follows the opening of Waterside Place in the Seaport across from the giant South Boston convention center, 315 on A over in Fort Point, and the new Victor by North Station.
But, sad to say, there is not an unlimited pool of deep-pocketed renters who can afford $3,000 studios and $6,000 two-bedrooms.
The 28-story Kensington on lower Washington Street in the city's Theater District opened last fall after nearly a decade of delays.
OK, to give credit where credit is due, the 381-unit Kensington is now half leased.
But the success has come at a cost to the developers, with a free rent promotion that offered six weeks free rent for those signing a one year lease and two months off for a two-year lease.
That promotion ended Dec. 31, though the Kensington continues to offer a month's free rent on some "select" two-bedrooms, according to a spokesman.
Others are playing the free-rent game as well.
Charlestown's Gatehouse 75 is offer a month's free rent on some two-bedrooms, which go for a hefty $3,200, while Eleven West Broadway just wrapped up a free rent promotion at its even more expensive units, which top out at $4,375, according to Curbed Boston, which also first reported the Kensington offer as well. One Back Bay will waive the security deposit if you agree to have our rent automatically debited from your account, the site notes.
Have luxury developers gone to far in jacking up rents? Will 2014 see a cooling off in the rental market?
What's your take?
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