LYNN — Rents in southern Essex County continue to rise, fueled by demand from tenants seeking refuge from even higher prices in the Boston area, according to new data from CoStar Group Inc.
Average rents on the North Shore rose to $1,743 in the first quarter, up from $1,672 for the same period last year, a 4.2 percent increase. The Washington D.C. company, with offices in Boston, tracks more than 7,500 units in Lynn, Lynnfield, Marblehead, Nahant, Peabody, Revere, Saugus, and Swampscott.
“Rent growth has been solid on the North Shore,” said Mark Hickey, a market economist at CoStar. “Suburban rents are doing better than the city, in part, because of a lack of construction.”
Brokers say as tenants are priced out of Boston, Malden, Medford, Everett, and Somerville, they are moving to the North Shore, and driving up prices.
“We’re seeing lots of clients who realize they can get cheaper rent if they are willing to live farther away from Boston, and the competition for those units is leading to higher rents,” said Eddie Brissett, an agent at Everett-based Pena Realty Corp.
CoStar reported rents in Boston’s downtown neighborhoods were $3,544 in the first quarter.
The most expensive apartments north of Boston are in Peabody where the average rent was $1,820 from January through March, a nearly 4 percent hike from $1,752 one year ago.
Revere has also seen strong rent growth. The average rent during the first quarter of 2018 was $1,797, up from $1,701 for the same period last year, a 5.6 percent hike. Much of the rent growth is driven by several new waterfront properties, including Ocean 650 Apartments on Ocean Avenue and Beach House on Revere Beach Boulevard.
In Lynn, average rents in the nearly 2,000 units tracked by CoStar were flat. The first quarter rents in 46 buildings surveyed was $1,353, not much change from $1,334 in the first quarter of 2017.
John M. Gilberg, president of Bayview Realty Corp. in Lynn and a director of The Item, said Lynn rents may have peaked.
“Without a doubt, rents have been rising for the last five years,” he said. “Even though the economy and the stock market are good, tenants have reached their saturation limit.”
Brissett said anecdotal evidence from his firm differs slightly from CoStar’s findings. He said rents in Lynn’s downtown are up by as much as 7 percent from a year ago.
“Lynn is improving and people are noticing,” he said.
One of the challenges for Lynn is the vacancy rate of just 2 percent, CoStar found. Of the 1,959 units traced in the survey, there were only 39 empty apartments.