Somerville Real Estate Market Review: 2023
Introduction
As we look back on 2023, I’m excited to share with you the following data pertaining to Somerville, 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:
Gilman Square ✦ Magoun Square ✦ East Somerville ✦ Sullivan Square ✦ Davis Square
Porter Square ✦ Ten Hills / Assembly Row ✦ Ball Square ✦ Union 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.
Gilman Square ✦ Magoun Square ✦ East Somerville ✦ Sullivan Square ✦ Davis Square
Porter Square ✦ Ten Hills / Assembly Row ✦ Ball Square ✦ Union Square
Gilman Square
Rental Units
The first thing you’ll notice here is that 2-bed Gilman Square rental prices have caught up to the most mature rental markets in Somerville - Porter and Davis Squares.
Pricing in Davis Square was about $3200/mo and Porter Square about $3225/mo. Meanwhile, up and coming Gilman Square is now at $3100/mo.
You will notice that the larger units in Gilman Square have not caught up nearly as much. That doesn’t surprise me, since Gilman Square attracts a lot of two-person scenarios - primarily young professional couples and roommates - who commute via the green line to downtown Boston.
Gilman Square 3-beds were averaging $3350/mo - still well below 3-beds in other areas Davis ($3900), Porter ($3725) and Ball Square ($3700). These other areas tend to have a more diversified tenant pool including a much larger segment of grads and PhDs AND more of them. The result is more demand and higher prices for the larger 3 and 4-bed rentals in those areas.
The same is true for 4-beds - $4125/mo for Gilman compared to $4800 for Davis, $4725 for Porter and $4650 for Ball Square.
Multi-Families
Next, you’ll notice that Gilman Square multi-families have some of the lowest sold prices in all of Somerville, behind only East Somerville for 2-families and tied with Magoun Square for lowest sold price for 3-families.
Gilman Square is still an up and coming area and prices reflect this lower price point. To me, Gilman Square is a great area to invest with tons of long term upside. We are already seeing rental numbers begin to catch up to other Somerville neighborhoods and it won’t be long before multi-family sold prices start catching up as well.
Magoun Square
Rental Units
Magoun Square came in the middle of the pack for rentals. Not quite on the lowest end of the spectrum like an East Somerville, but not on the high end like Davis and Porter Squares.
I see steady growth when it comes to Magoun Square for years to come as renters look for cheaper alternatives compared to Porter, Davis and Union Square. As more renters come in to these areas, I expect to see 3 and 4-beds units to increase in price. This should cause the spread between these rental numbers and those of more well-established neighborhoods to decrease over the next few years.
Multi-Families
Magoun Square 2-families are still some of the most affordable in all of Somerville. I think this area is a great place to purchase and you get great value when you compare sales prices to rental price.
Magoun Square also has some of the lowest cost 3-family properties available in all of Somerville. 3-family inventory is only a fraction of the multi-family inventory each year, so you’ll have to be patient if you’re targeting a triple decker. However, there are great opportunities in the Magoun Square market for this property type.
East Somerville
Rental Units
East Somerville has some of the lowest rental numbers overall which is not surprising. Generally, East Somerville rental numbers lag behind all other neighborhoods in Somerville.
For some investors East Somerville gets a bad rap, but I think there is tremendous value when you dig deeper into the numbers.
First, 2-bed units are right in the middle of the pack compared to other neighborhoods in Somerville.
Second, with the East Somerville green line in place, I expect to see increases in rental and property values for the long-term.
Third, when you take a second to compare East Somerville to other towns outside of Somerville, the rental numbers look very strong. I see serious upside in East Somerville for first-time, long-term buy/hold investors.
Multi-Families
East Somerville wins the crown for the lowest sold price for 2-families in all of Somerville, coming in at a low $920,000 (low is relative in the Somerville market)!
For those on a tighter budget or owner occupants looking to get into the multi-family market with a lower down payment, East Somerville is a great place to start.
I think of East Somerville as a great place to get your foot in the door and then you can have multiple options in future years. You can hold and see the longer term increases in rent and property value - and then eventually you can1031 into properties in other areas with potentially more long term upside. Or you will be able to sell and move on with some solid returns.
3-families are also well priced in East Somerville, coming in at $1.28M, rounding out the lower tier multi market in Somerville (with Gilman and Magoun Squares).
Sullivan Square
Rental Units
The first thing you’ll notice about Sullivan Square rentals is that 1-bed data is lacking. That surprises me a little bit, since I’ve rented quite a few 1-bed units in the Sullivan Sq area, most commonly in beautiful victorian homes that were chopped up into multi-families years ago.
MLS is only one chunk of the entire data when it comes to rentals, since a good amount of rentals happen off of MLS, so unfortunately we don’t have the data for 1-beds here. I would guesstimate the numbers would fall in line with the East Somerville 1-beds, right around $2200/mo.
Sullivan has the lowest price point for 2-beds of all neighborhoods in Somerville, coming in at $2800/mo. That doesn’t surprise me as I have found orange line commuters tend to pay less in rent than green line commuters, and green line commuters tend to pay less than red line commuters (although that could be changing as time goes on with the green line extension now in place).
I was also surprised to see a high 3-bed rent price of $3800 for Sullivan - I can’t quite make sense of that. My best guess is a large chunk of the 3-beds rented in Sullivan in 2023 were condo conversions with high quality finishes. For a run of the mill Somerville 3-bed, I would expect rents in Sullivan to be towards the low $3000 price point.
Multi-Families
Sullivan Square 2-families came in at a median price point of $1.2M, right in the middle of the pack. Over the long haul, I would expect Sullivan Square multis to be on the low end of Somerville multi-family sales prices and most likely this data is an anomaly.
Unfortunately we did not have enough sales data for 3-families in Sullivan.
Davis Square
Rental Units
Davis Square continues to be a market leader when it comes to rentals. It came in 2nd place for 1-beds, hovering towards the top for 2-beds, and in first position for 3 and 4-beds.
Davis is attractive to investors because of its diverse tenant pool - it attracts young professionals commuting to Kendall Square and Boston, it attracts Tufts grad/PhD students, as well as Harvard/MIT/Lesley commuters. The result is high tenant interest and high prices for all types of bed/bath configurations.
Multi-Families
Davis Square rentals also came in 1st for highest sales prices for 2-familiies ($1.42M) and 3-families ($1.68M). Again, not a surprise as Davis Square is the most mature market of all areas within Somerville.
Not only is the tenant pool well diversified, but they have the cool factor between Davis Square and Mass Ave with tons of amazing restaurants, shops, cafes, a movie theater, grocery stores, etc.
For Davis Square you pay a premium up front and you get a premium product with constant high demand in return. I expect Davis Square rents and property values to slowly and consistently increase as time goes on.
Porter Square
Rental Units
Porter Square is like the smaller sibling to Davis Square. Pretty similar characteristics in terms of rental numbers (2nd place for 2-beds, 3rd place for 3-beds, and 2nd place for 4-beds).
It is also similar in terms of tenant demographics, with a heavier Harvard grad/PhD presence in this part of Somerville. Overall, a very strong, mature rental market with solid numbers throughout.
Multi-Families
Same story here as Davis Square - finishing essentially 2nd in 2-family sales prices at $1.29M and essentially tied for 1st at $1.67M for 3-families. Strong market, solid numbers, solid long term outlook, and high upfront costs to get into this market.
Ten Hills / Assembly Row
Rental Units
Ten Hills is one of my favorite areas to explore with investors. Why? It’s a hidden gem with really solid rental numbers and a really strong long-term outlook. It’s right across from Assembly Row with tons of shopping, restaurants, grocery stores PLUS lots of long-term development planned in the future.
And you see that reflected in the numbers. Ten Hills was ranked #1 for 1-bed rents in Somerville, coming in at $2875/mo. It also put up solid numbers for 2-beds, coming in at $3125/mo.
3-beds are the lowest in all of Somerville, which is intriguing to me. This could be because typically units with 3 beds in Ten Hills will have 2-beds on the second floor and a third on the 3rd floor with very slanty ceilings and poor ceiling height. Renters love to be close to Assembly, but they aren’t going to pay a premium for a 3rd bedroom with poor ceiling height.
Finally, you’ll notice the N/A for 4-beds. Not a surprise, as 4-beds are fairly rare to come by in Ten Hills - I have seen a few and most often units have been dormered out by owner occupants or developers. There just aren’t many of them in this part of town!
Multi-Families
First off, you’ll notice N/A for 3-families - again not a surprise as I have yet to see a 3-family in all of Ten Hills. I’m not even sure if any exist in this part of town. They are virtually all 2-family properties.
The 2-family price point at $1.2M feels like a good one when you look at the price point for the 2-bed units. I like Ten Hills a lot, especially for someone early on in their investing journey considering an owner occupant scenario. Great proximity to cool things, very driveable and still have access to the T to downtown Boston. Add in strong long-term upside for this neighborhood and I think it’s a great area to target.
Ball Square
Rental Units
The first thing I noticed with Ball Square rentals was the major increase in rents for the 3 and 4-bed apartments compared to just a few years ago. Now that the green line extension is in place, Ball Square rents have dramatically increased, particularly for larger units.
3-beds in Ball Square came in at $3700, the low end of the top tier. 4-beds came in at $4650, again towards the low end of the top tier.
With the strong mix of young professionals and Tufts grads/PhDs, I expect to see the 3 and 4-bed units in this area to continue to increase in 2024. 1 and 2-bed units may lag behind in rental growth based on the tenant demographics in this area, which can skew a little bit younger.
Multi-Families
A lot of investors in 2023 got excited about Ball Square and the new green line extension and it makes a lot of sense. It’s the neighborhood right next to Davis Square and we are seeing more and more renters push into the Ball Square area as time goes on.
Since Ball Square is right next to Davis Square, I believe a lot of investors see it as the next place to be after Davis Square. While I like Ball Square and think it’s a great place to invest, I think other areas have more long-term upside and I do think some investors are overpaying for multis, at least based on the overall 2023 data and many multis I’ve seen sold throughout 2023.
Union Square
Rental Units
Union Square continues to creep upwards this year, with top tier numbers for 1 and 2-bed units. 1 beds came in at $2600/mo and 2-beds at $3215/mo.
Of all the areas to invest, Union Square may be the best long-term place to be. We of course have the new green line extension, but also lots of planned development over the next 10ish years.
Rental numbers in Union have already been going upwards and I expect them to eventually match or come close to matching the most mature markets of Davis and Porter Square.
Multi-Families
2-families in Union Square were surprisingly affordable for 2023 coming in at $1.05M. Many of these were in poor shape which may skew the data a bit. A good condition 2-family walking distance to Union Square could easily go for $1.2 - $1.3M+ even in 2023 when interest rates were north of 7%.
You will notice the 3-family sold price continues to creep up in Union, currently at $1.51M for 2023. I expect this number will continue to rise and get very close to matching the highs of Davis and Porter over the next 5 years.
And that wraps up the latest data and my analysis on Somerville! If you want to discuss further, give me a ring/text at 617-833-7457 or shoot me an email at Sage@CambridgeSage.com