Rents Grow; Homes, Commercial Developments Still Low

By Veronica Grecu, Associate Editor

A new report released by S&P/Case-Shiller Home Price Indices shows that home values for the Boston area dropped by about 1.5 percent in February, for the seventh consecutive month. That is good news for the rental housing market.

Karl Case, co-founder of the index, attributed the decrease to prospective buyers’ difficulties in obtaining financing, sellers’ reluctance to drop their prices and the cold February weather, which kept potential buyers indoors. According to The Boston Globe, Case expects an improvement in the April and May numbers, reflecting the improved weather.

Renters, on the other hand, can expect rising prices and a solid market over the next few years. Recent data released by the Joint Center for Housing Studies in Harvard shows that rental and vacancy rates are going up again after the Great Recession years.

As compared to 2009, when professionally managed apartment rents dropped by 4.1 percent, at the end of 2010 they gained 2.3 percent. Also, apartment complex vacancies fell 8.2 percent in 2009, only to increase by 6.5 percent in 2010. In both cases, figures are expected to look even better this year.

In nearby Plymouth, recent figures show building permits for new homes actually increased last year, to 145 filings totaling $34.5 million as compared to $24.8 million for 121 permits filed in 2009. Nonetheless, the town’s property values have continued to decrease, with an assessed real estate value of $8.5 billion for this year, 3 percent lower than the $8.7 billion recorded last year.

Commercial developments and property values in Plymouth likewise have stayed low. In 2010, Plymouth developers obtained 94 building permits for commercial properties, only half the number recorded in 2009. Last year’s permits were valued at $83.6 million, 12 times the amount recorded in 2009, but 2010 was actually a flat year since two of the major projects were managed by the town (a new Plymouth North High School and a new senior center).