The South Boston Waterfront is on the cusp of surpassing the Back Bay as the most highly sought-after of the city’s submarkets, according to a report from Cassidy Turley FHO.

In the past 12 months, the Waterfront "has all but replaced Back Bay as the new ‘it’ neighborhood," as its availability rate plummeted 6.7 percentage points to 21.8 percent, according to the firm’s report for the first quarter of 2012.

Migration from pricey Cambridge, as well as the suburbs, is continuing to drive market activity, the firm reports. However, there are limited Seaport options for users looking for 100,000 square feet or more. Users seeking less than 50,000 square feet still have significant options, according to Cassidy Turley FHO.

One story to watch along the South Boston Waterfront in 2012 is the potential of speculative redevelopment of properties. Cassidy Turley FHO says it’s a less risky investment because fast redevelopment turnaround time offers the ability to respond to immediate demand, as opposed to speculative ground-up development.

The firm is predicting increasing demand, especially from the technology sector, will lead landlords to try raising rents. Overall asking rents along the waterfront are up 3.1 percent to $38.74 per square foot in the past year, according to the report, and Class A rents alone have has jumped 7.1 percent to $52.87 a square foot. Those Class A rents are only 3.5 percent lower than Class A asking rents in Back Bay, the firm reports.

On a broader level, first quarter figures indicate that conditions in downtown Boston are stable, with absorption totaling 150,694 square feet. However, net growth remains elusive.