Cambridge Real Estate Market Review: 2023
Introduction
As we look back on 2023, I’m excited to share with you the following data pertaining to Cambridge, Massachusetts, broken down by specific neighborhood:
The median prices that 1- 4 bedroom units actually rented for in 2023.
The median prices that 2 and 3 family properties actually sold for in 2023.
If you want to skip the high-level data summary and jump RIGHT to details on your neighborhood only, click on one of the links below:
Central Square / Cambridgeport ✦ Harvard Square ✦ Kendall Square ✦ Alewife ✦ Porter Square ✦ Davis Square
Data Summary
This data could be valuable to you in several cases:
You own a multi-family property in one of these neighborhoods: The data will give you a general understanding of rental rates and how your rental pricing compares.
You’re interested in selling in one of these neighborhoods. The data will give you a general understanding of what properties were selling for last year.
You’re interested in buying/investing in one of these neighborhoods. The data will give you a general understanding of what you might have to pay in order to get your foot in the door as an investor. You’ll also begin to see what types of rents you might be able to capture as a part of your investment strategy.
A few quick caveats on the data:
The data is from MLSpin. Understand that there are many rentals that also happen off MLS.
No off-market data is included.
All data is median, not average. For this data set I found that averages are misleading and skewed by outlier data points.
Some fields have N/A. We require a minimum 10 rental data points or 3 buy/sell data points to populate data.
All neighborhood locations are 0.5 mile radius from their T or commuter rail stop
Unfortunately there was insufficient data to include studios this year
After looking at this data, are you concerned your rental is underpriced or overpriced? Are you curious about selling or investing in multi-families? Please give me a ring to discuss anytime at 617-833-7457. Read on for my thoughts and analysis.
Neighborhood Deep Dive
Continue reading for my thoughts on each neighborhood. If you don’t want to scroll to find the neighborhood you’re interested in, just click on one of the links below.
Central Square / Cambridgeport ✦ Harvard Square ✦ Kendall Square ✦ Alewife ✦ Porter Square ✦ Davis Square
Central Square / Cambridgeport
Rental Units
Central Square has some of the highest rental prices of any area we took a look at - particularly for 2-bed units. Those came in at $3600/mo, the only area higher was Kendall Square which came in at $4365/mo. However, Kendall Sq numbers are skewed because a large chunk of inventory close to Kendall Square are large luxury rentals, not old 2 and 3-families built in the early 1900s.
Central Square has arguably the most diverse tenant pool in all the areas we look at as well - Harvard grads/PhDs, MIT grads/PhDs, biotech/biopharma commuters to Kendall, and young professionals commuting to Boston.
The result is top ranked rental prices across the board with low DOM (days on market), meaning not only do these units rent at a high price, but they tend to rent within a few days during the busy season.
Multi-Families
We don’t have a ton of multi-family sales data in Cambridge unfortunately - there just weren’t that many transactions on the multi-family front in 2023. But for Central Square we did have enough data and boy are these multis pricey.
A 2-family median sale price was $1.6M while a 3-family was $1.95M. These high prices are driven by sky high demand, including wealthy Harvard/MIT parents and biotech/biopharma executives.
Central Square is a great place to invest if you can afford the high price points and plan to be in the market for a long time. It’s a very mature, safe market with great long-term upside.
Harvard Square
Rental Units
Harvard Square has extremely high rental prices and the absolute highest in our analysis for 3 and 4-beds ($4925/mo for 3-beds and $6500/mo for 4-beds). And that’s no surprise, Harvard Square has very limited inventory and even fewer options for 3 and 4-beds.
So when good options do come up, they tend to get grabbed by Harvard grads/PhDs in groups of 3s and 4s who are willing to pay a premium for A+ convenient locations.
Multi-Families
Unfortunately we didn’t have enough data for 2-family sales close to Harvard Sq, but we did for 3-families and the median price point was a very high $2.7M. Arguably the most desirable place to own a multi-family is Harvard Square. Truly an A+ market with extremely constrained supply and perhaps the most well diversified tenant pool in Massachusetts.
Just like Central Square, it takes a lot of cash to get into these markets, but they are excellent long-term bets.
Kendall Square
Rental Units
Kendall Square rentals had the highest prices for 1 and 2-beds ($3438 for 1-beds and $4365 for 2-beds), but the numbers are a little misleading. Whereas the other units in our analysis are typically from 2 and 3-family properties built in the early 1900s, the vast majority of units in Kendall Square are new luxury rentals with tons of amenities.
So while the numbers look impressive, I have to add a caveat that we are not making a true apples to apples comparison for this particular neighborhood.
This also explains why N/A is ticked for 4-beds, the vast majority of luxury rentals are 1-3 beds, and rarely do we see 4-beds, so no surprise not to have the data here.
Multi-Families
No data available - as mentioned above, there just aren’t many 2 and 3 families in the Kendall Square area - almost all the buildings are luxury rentals.
Alewife
Rental Units
Properties by Alewife tend to have the lowest rental prices compared to other neighborhoods in Cambridge, and the data mostly beared this out. Rental prices were higher than I expected for 1 and 2 bedrooms ($2725/mo for 1s and $3497/mo for 2s). I attribute these higher numbers to more renovated condos hitting the market in Alewife over the last few years.
Multi-Families
Unfortunately we didn’t have enough sales data for Alewife multifamilies in 2023.
Porter Square
Rental Units
It’s amazing how the power of location can dramatically impact rental prices. We analyze rent prices in Porter Square for both the Somerville and Cambridge sides of town. And the Cambridge side is just, much, much higher. Take a look at the Somerville side of Porter Square:
1-bed = $2400, 2-bed = $3225, 3-bed = $3725
Now compare them to their Cambridge counterparts:
1-bed = $2900, 2-bed = $3587, 3-bed = $4500
There are massive jumps simply because Cambridge units tend to be closer to Harvard Square which attracts tenants with larger budgets and more motivation - if you are are a grad or PhD student at Harvard and you need off campus housing, you just need to make it happen. If you are a young professional looking to be on the redline, you typically have more location flexibility.
Multi-Families
Unfortunately we didn’t have enough data for Porter Square multis in 2023. I expect this to change in 2024 with more multis coming on the market. If you are thinking about purchasing a multi in Porter Square in 2024, please reach out as I have at least one that I expect to hit the market in the spring.
Davis Square
Rental Units
Interesting dynamic here. Whereas Cambridge rental prices were much higher for Porter Square compared to Somerville Porter Square rentals, the opposite is true here. Let’s look at Davis Square rentals in Somerville first:
1-bed = $2700, 2-bed = $3200, 3-bed = $3900
Now Cambridge:
1-bed = $2500, 2-bed = $3000, 4-bed = $4000
Why the negative trajectory? Once again, location, location, location. If you look at a map of Cambridge, you’ll see that the vast majority of walking distance Davis Square rentals in Cambridge are in North Cambridge on the other side of Mass Ave. North Cambridge rental prices tend to be among the lowest in all of Cambridge, besides East Cambridge.
On the flip side, Davis Square rentals in Somerville are on the Davis Square side of Mass Ave, which tend to be significantly more desirable because they are A) A shorter walk to the heart of Davis Square and B) You don’t have to cross busy Mass Ave to get around town.
This is why location is the first factor to consider when evaluating investment properties to purchase. You can be five minutes away and see a difference in rent of $500/mo+ or see no difference at all.
Multi-Families
Unfortunately we did not have enough data in 2023 for multis in Davis Square in Cambridge.
And that wraps up the latest data and my analysis on Cambridge! If you want to discuss further, give me a ring/text at 617-833-7457 or shoot me an email at Sage@CambridgeSage.com.