Rent vs. Buy Analysis Allston MA

Allston has historically been one of Boston’s more modest housing markets. Located close to some of Boston Metro’s largest universities, the area is known to be a student enclave where coeds can escape the high rent prices that are typical of Fenway, Symphony, and South End. Still, average rents for Allston apartments have been on the rise in recent years as off-campus housing demand has increased along with student enrollment.

If you or a loved one are moving to the area, you may be wondering whether Allston is still a viable neighborhood for an investment in real estate or if you’d be better off renting an apartment. The following analysis will break down the average NOI (Net Operating Income) of Allston condos and single family homes by comparing the current average rent price with up to date median sale prices from MLS.

Housing Supply Statistics for Allston MA

The apartment supply in Allston is one of the largest in Boston due to the vast demand for off campus housing in the area. Rental availability is highly cyclical and revolves around the academic calendar. Inventory is tightest in the fall months following the beginning of the first semester and tends to peak in April as the second semester nears its end.

At this moment, Allston's apartment availability rate sits at 1.65%, almost identical to the Boston availability rate of 1.65%. The vacancy rate in Allston (0.58%) is quite a bit lower than Boston’s now (0.85%), suggesting that apartment supply is tighter than it has been historically. Still, there are 77 apartments available for rent in Allston currently which is significantly more than most Boston neighborhoods.

In terms of real estate inventory for residential for-sale properties, the current number of active MLS listings in Allston is even smaller than that of rentals. There are only 16 residential homes for sale in Allston in MLS at the moment, and only 106 property transactions recorded over the past 365 days. That is the 10th lowest number of real estate sales out of the 33 neighborhoods closest to Boston. There are far more condo for sale in Allston than single-family or multi-family properties, and it’s becoming more and more rare to even see a single-family home on the market in Allston.

Average Apartment Rent Price in Allston

The average rent price in Allston is $2,355, roughly 10% less than the average rent for Boston apartments ($2,532). Allston average rent price is similar to that of Fort Hill ($2,418) and Jamaica Plain ($2,316).

Rent vs. Buy Comparison: Allston Single Family Homes

Due to the short supply of single family homes for sale in Allston, real estate prices have gone through the ceiling for these types of properties. The median sales price for single family in Allston is $878,375 over the past 365 days, which is more than $100,000 north of Boston’s median single family home price ($772,925).

Based on a 30 year mortgage with 30% down and a 3% interest rate, that would equate to a $2,592 average monthly mortgage premium in Allston. When Boston’s property tax rate and average homeowner’s insurance are factored in, it would cost a resident $1,139 more per month to own a house in Allston than it would to rent an apartment.

Rent vs. Buy Comparison: Allston Condos

Thanks to a growing supply of Allston condos in the housing inventory, prices have remained affordable for condo listings in spite of the rising prices for houses. Allston’s 1 year median condo sales price is $484,989, which is the 3rd lowest among all 33 neighborhoods in Metro Boston.

As a result, buying a condo in Allston could actually cost less than renting an apartment. Based on the same mortgage term, interest rate, property tax and homeowner’s insurance parameters mentioned above (with an added $300 in monthly expenses for average HOA fees), the monthly cost for a condo in Allston would be $2,228 on average. Compared to Allston’s average rent of $2,356, an Allston resident could save $68 a month owning a condo vs. renting an apartment.

In conclusion, Allston is still a good market for real estate buyers long as they know what kind of properties to look for. Single-family and multi-family prices will in many cost more than renting based on current pricing, but condo properties will present an opportunity for buyers to pay less than what they would on rent. All real estate sales data pulled from Massachusetts MLS, all apartment data provided by Boston Pads.