Those look like lightsabers lol.
You'd think that with all of these new apartment buildings being built that at some point there will be a limit to the amount of people that can afford or willing to pay those kinds of rents. Will there be an over-saturation of the "luxury" apartment?
^^ Agreed. The area median income for Greater Boston is something like $70,000/year. The rule of thumb realtors and renters go by in Boston (aka the Rule of 36) is that your monthly rent should not exceed 1/36 of your pretax annual salary. Going by that rule, the average person here can technically afford around $2,000/mo rent. Looking at the new luxury inventory here ($2600-$3400/mo for a 1-bed), their attractive amenities (onsite gym, covered parking, rooftop lounges, etc), and the cost-saving move-in deals (1-, 2-, or even 3 months free rent, only $500-$1000 security deposit up front, and even several now paying the brokers fee), the adjusted cost of living in these new buildings is really attractive AND affordable for a large chunk of the population. Not all of them, but enough of them that the momentum isn't about to die off.
Who would've expected Kensington to fill up in 11 months, right? The demand is here.
Keep in mind too the pronounced trend of vanguard Millennials preferring city-living to buying a house in the burbs. This topic has been discussed ad nauseum on SSP; five of the Big 6 (Philly always lags the others), plus Seattle, are seeing core growth like we haven't seen since the late 40s. And it's young people who can afford to live in the core of these top markets who are driving the growth. A couple hundred luxury units (and in my mind, USD 2,000 a month, regardless of the space you're getting, doesn't qualify as "luxury") aren't going to make a dent in overall demand.
Here's the latest thread covering a related topic: Urban Core Growth, 2000-2010. Out of all metros with 1 million or more people (I believe there are 54 in total with 1 million+), Boston ranked 5th both in terms of raw population added AND in terms of percentage growth.
Raw Growth Top 10:
1. New York
2. Los Angeles
3. Washington
4. Seattle
5. Boston
6. Miami
7. San Francisco
8. Portland
9. San Jose
10. San Diego
Percentage Growth Top 10:
1. Seattle
2. Washington
3. Portland
4. New York
5. Boston
6. San Francisco
7. Miami
8. San Jose
9. Austin and Los Angeles (tie)
Wow, it is always just crazy to me how expensive class A apartments are in central Boston. Even DC, another higher income land constrained city, seems cheap by comparison. Good to see the building doing well though.
You'd think that with all of these new apartment buildings being built that at some point there will be a limit to the amount of people that can afford or willing to pay those kinds of rents. Will there be an over-saturation of the "luxury" apartment?
Yes, absolutely. I imagine that's a concern for luxury apartment buildings that are planning on breaking ground soon, weighing possibility of over-saturation.
If the economy slows down over next two years and thousands of additional units come online in Boston (not to mention Cambridge, Assembly, etc.) the whole business model for the building will not be realized. This would, in theory, benefit the renters with lower rent prices and more competition. But as it stands now, demand is strong and has been for years.