Twenty twenty-one was a record-breaking year for apartment owners and operators in the Boston metropolitan area. A resilient economy and recovering office sector combined to drive almost every metric to new highs (or lows). New benchmarks were set in net units absorbed, asking rents, market sales price, total sales volume, and cap rates. There almost certainly will be a leveling-off in some of these key performance indicators, and time will tell whether it is enough to derail the market’s momentum. Near-term indicators don’t show leverage shifting back to renters in 2022.

Vacancy dropped to a decade low following unprecedented renter move-ins, with absorption topping 16,000 units. Boston’s hyper development has been a sight to behold in areas in and out of the city proper, and decelerating deliveries created a competitive landscape in leasing offices. One year after net new units smashed through the previous high mark, deliveries were the lowest since 2016 and fell below 7,500 for just the second time in seven years.

CoStar’s baseline outlook shows a similar range for the next 24 months. Pockets of heavy building will persist in recent city hotspots, but there are also significant projects underway in submarkets outside the urban core relative to existing inventory.

Just as most construction in the past 12-24 months has been in Boston proper or its first-ring suburbs, so were most of the top-dollar deals in 2021’s investment frenzy. While significant volume has poured into northern parts of the metro, the highest price tags and lowest cap rates can be found near Harvard and MIT, the Seaport area, Downtown, and Fenway/Mission Hill.