<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                 --------------

                                    FORM 10-Q

(Mark One)


 X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---   EXCHANGE ACT OF 1934


For the quarterly period ended      June 30, 2002    OR


      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---   EXCHANGE ACT OF 1934


For the transition period from ______________________ to _______________________


                         Commission file number 0-12138

<TABLE>
<S>                                                                                  <C>

New England Realty Associates Limited Partnership
(Exact Name of Registrant as Specified in Its Charter)

Massachusetts                                                                                     04-2619298
(State or Other Jurisdiction of Incorporation or Organization)                       (I.R.S. Employer Identification No.)

39 Brighton Avenue, Allston, Massachusetts                                                          02134
(Address of Principal Executive Offices)                                                          (Zip Code)

Registrant's Telephone Number, Including Area Code                                              (617) 783-0039

Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
</TABLE>


         Indicate by an X whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  X   No
                                               ---     ---


<PAGE>


                                      INDEX

                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                                                                                       Page No.
<S>               <C>                                                                   <C>
Item 1.           Financial Statements.

                  Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001    1

                  Consolidated Statements of Income for the Three Months Ended
                  June 30, 2002 and June 30, 2001, and the Six Months Ended June 30,
                  2002 and June 30, 2001                                                   2

                  Consolidated Statement of Changes in Partners' Capital                   3

                  Consolidated Statements of Cash Flows for the Six Months Ended
                  June 30, 2002 and June 30, 2001                                          4

                  Notes to Financial Statements                                            5

Item 2.           Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                   13

Item 6.           Exhibits and Reports on Form 8-K                                        19

SIGNATURES                                                                                20
</TABLE>


<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                      JUNE 30,                  DECEMBER 31,
                                                                        2002                        2001
                                                                    (UNAUDITED)
                                                                    -----------                 ------------
<S>                                                                 <C>                          <C>
ASSETS
Rental Properties                                                   $ 80,844,433                 $73,941,098
Cash and Cash Equivalents                                             16,789,882                  16,690,943
Rents Receivable                                                         596,868                     513,181
Real Estate Tax Escrows                                                  336,560                     332,282
Prepaid Expenses and Other Assets                                      2,332,559                   2,190,978
Investment in Partnership                                              1,504,924                   1,944,060
Financing and Leasing Fees                                               806,046                     816,414
                                                                    ------------                 -----------
     TOTAL ASSETS                                                   $103,211,272                 $96,428,956
                                                                    ============                 ===========

LIABILITIES AND PARTNERS' CAPITAL
Mortgages Payable                                                   $ 84,578,053                 $79,613,051
Accounts Payable and Accrued Expenses                                  1,241,465                   1,163,606
Advance Rental Payments and Security Deposits                          3,353,912                   3,171,127
                                                                    ------------                 -----------
     Total Liabilities                                                89,173,430                  83,947,784

Commitments and Contingent Liabilities (Note 9)

Partners' Capital
   173,252 units outstanding in 2002 and 2001                         14,037,842                  12,481,172
                                                                    ------------                 -----------
     TOTAL LIABILITIES AND PARTNERS' CAPITAL                        $103,211,272                 $96,428,956
                                                                    ============                 ===========
</TABLE>

See notes to consolidated financial statements.


                                       1
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                            THREE MONTHS ENDED                     SIX MONTHS ENDED
                                                 JUNE 30                               JUNE 30
                                         2002               2001               2002             2001
                                      ----------         ----------         -----------      -----------
<S>                                   <C>                <C>                <C>              <C>
Revenue
  Rental income                       $7,307,059         $6,763,514         $14,662,968      $13,415,001
  Laundry and sundry income               61,029             68,320             123,189          130,886
                                      ----------         ----------         -----------      -----------
                                       7,368,088          6,831,834          14,786,157       13,545,887
                                      ----------         ----------         -----------      -----------

Expense
 Administrative                          305,329            357,286             674,985          658,118
 Depreciation and amortization         1,178,960          1,070,992           2,244,010        2,104,599
 Interest                              1,633,160          1,634,105           3,244,906        3,251,060
 Management fees                         302,700            285,283             603,154          558,434
 Operating                               538,497            581,635           1,265,095        1,464,196
 Renting                                  80,065             28,413             145,030           54,723
 Repairs and maintenance                 867,343            878,201           1,548,437        1,507,995
 Taxes and insurance                     758,769            601,745           1,509,845        1,210,687
                                      ----------         ----------         -----------      -----------
                                       5,664,823          5,437,660          11,235,462       10,809,812
                                      ----------         ----------         -----------      -----------

Income from operations                 1,703,265          1,394,174           3,550,695        2,736,075
                                      ----------         ----------         -----------      -----------

Other Income (Loss)
  Interest income                         71,335            154,917             137,639          366,945
Income (loss) from investment in
  partnership and joint venture           (3,825)                 0              (9,633)               0
Gain on the sale of real estate           92,778                  0              92,778                0
                                      ----------         ----------         -----------      -----------
                                         160,288            154,917             220,784          366,945
                                      ----------         ----------         -----------      -----------
Net Income                            $1,863,553         $1,549,091         $ 3,771,479      $ 3,103,020
                                      ==========         ==========         ===========      ===========

Net Income per Unit                   $    10.76         $     8.94          $    21.77       $    17.91
                                      ==========         ==========         ===========      ===========
Weighted Average Number
   of Units Outstanding                  173,252            173,252             173,252          173,252
                                      ==========         ==========         ===========      ===========
</TABLE>


See notes to consolidated financial statements.


                                       2
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                             Limited
                                   -----------------------------        General
                                     Class A           Class B         Partnership         Total
                                   -----------        ----------       -----------      -----------
<S>                                <C>                <C>               <C>             <C>
Balance, January 1, 2001           $ 7,113,724        $1,692,964        $ 89,132        $ 8,895,820

Distribution to Partners            (1,535,991)         (364,798)        (19,200)        (1,919,989)

Net Income                           2,482,416           589,574          31,030          3,103,020
                                   -----------        ----------        --------        -----------
Balance June 30, 2001              $ 8,060,149        $1,917,740        $100,962        $10,078,851
                                   ===========        ==========        ========        ===========
Units authorized and Issued,
net of 6,973 Treasury Units at
June 30, 2001                          138,602            32,918           1,732            173,252
                                   ===========        ==========        ========        ===========


Balance, January 1, 2002           $ 9,982,006        $2,374,180        $124,986        $12,481,172

Distribution to Partners            (1,771,847)         (420,814)        (22,148)        (2,214,809)

Net Income                           3,017,183           716,581          37,715          3,771,479
                                   -----------        ----------        --------        -----------
Balance June 30, 2002              $11,227,342        $2,669,947        $140,553        $14,037,842
                                   ===========        ==========        ========        ===========

Units authorized and Issued,
net of 6,973 Treasury Units at
June 30, 2002                          138,602            32,918           1,732            173,252
                                   ===========        ==========        ========        ===========
</TABLE>

See notes to consolidated financial statements


                                       3

<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                          Six Months Ended
                                                                               June 30,
                                                                             (Unaudited)
                                                                        2002            2001
                                                                     -----------     -----------
<S>                                                                  <C>             <C>
Cash Flows from Operating Activities
   Net income                                                        $ 3,771,479     $ 3,103,020
                                                                     -----------     -----------
Adjustments to reconcile net income to net cash provided
 by operating activities
   Depreciation and amortization                                       2,244,010       2,104,599
   Gain on the sale of rental property                                   (92,778)             --
   Loss from investment in partnership and joint venture                   9,633              --
Change in assets and liabilities
  (Increase) in rents receivable                                         (83,687)       (155,824)
  (Increase) in financing and leasing fees                               (64,811)       (132,692)
  Increase (decrease) in accounts payable                                 77,859         324,577
  (Increase) decrease in real estate tax escrow                           (4,278)         (7,576)
  (Increase) decrease in prepaid expenses and other assets              (141,581)       (234,650)
  Increase in advance rental payments and security deposits              182,785         263,366
                                                                     -----------     -----------
  Total Adjustments                                                    2,127,152       2,161,800
                                                                     -----------     -----------
Net cash provided by operating activities                              5,898,631       5,264,820
                                                                     -----------     -----------
Cash Flows from Investing Activities
  Distribution from Partnership                                          429,503              --
  Purchase and improvement of rental properties                       (3,713,855)     (1,216,283)
  Net proceeds from the sale of rental property                          104,494              --
                                                                     -----------     -----------
Net cash  provided by (used in) investing activities                  (3,179,858)     (1,216,283)
                                                                     -----------     -----------
Cash Flows from Financing Activities
  Principal payments of mortgages payable                               (405,025)       (375,385)
  Distributions to partners                                           (2,214,809)     (1,919,989)
                                                                     -----------     -----------
Net cash provided by (used in) financing activities                   (2,619,834)     (2,295,374)
                                                                     -----------     -----------
Net Increase in Cash and Cash Equivalents                                 98,939       1,753.163
Cash and Cash Equivalents, at beginning of year                       16,690,943      14,478,972
                                                                     -----------     -----------
Cash and Cash Equivalents, at end of year                            $16,789,882     $16,232,135
                                                                     ===========     ===========
</TABLE>

See notes to consolidated financial statements.


                                       4
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

LINE OF BUSINESS: New England Realty Associates Limited Partnership ("NERA" or
the "Partnership") was organized in Massachusetts during 1977. NERA and its
subsidiaries own and operate various residential apartment buildings,
condominium units and commercial properties located in Massachusetts,
Connecticut and New Hampshire. NERA has also made investments in other real
estate partnerships and has participated in other real estate-related
activities, primarily located in Massachusetts. In connection with the mortgages
referred to in Note 5, a substantial number of NERA's properties are owned by
separate subsidiaries without any change in the historical cost basis.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership
interest in each subsidiary except for the limited liability company formed in
November 2001, in which the Partnership has a 50% interest. The consolidated
group is referred to as the "Partnerships." Minority interests are not recorded,
since they are insignificant. All significant intercompany accounts and
transactions are eliminated in consolidation. The Partnership accounts for its
investment in its 50% owned limited liability company using the equity method.

ACCOUNTING ESTIMATES: The preparation of the financial statements, in conformity
with accounting principles generally accepted in the United States of America,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Accordingly, actual results
could differ from those estimates.

REVENUE RECOGNITION: Rental income from residential and commercial properties is
recognized over the term of the related lease. Amounts 60 days in arrears are
charged against income. Certain leases of the commercial properties provide for
increasing stepped minimum rents, which are accounted for on a straight-line
basis over the term of the lease.

RENTAL PROPERTIES: Rental properties are stated at cost less accumulated
depreciation. Maintenance and repairs are charged to expense as incurred;
improvements and additions are capitalized. When assets are retired or otherwise
disposed of, the cost of the asset and related accumulated depreciation is
eliminated from the accounts, and any gain or loss on such disposition is
included in income. Rental properties are depreciated on the straight-line
method over their estimated useful lives. In the event that facts and
circumstances indicate that the carrying value of rental properties may be
impaired, an analysis of recoverability is performed. The estimated future
undiscounted cash flows are compared to the asset's carrying value to determine
if a write-down to fair value or discounted cash flow value is required.

FINANCING AND LEASING FEES: Financing fees are capitalized and amortized, using
the interest method, over the life of the related mortgages. Leasing fees are
capitalized and amortized on a straight-line basis over the life of the related
lease.

INCOME TAXES: The financial statements have been prepared under the basis that
NERA and its subsidiaries are entitled to tax treatment as partnerships.
Accordingly, no provision for income taxes on income has been recorded.

CASH EQUIVALENTS: The Partnerships consider cash equivalents to be all highly
liquid instruments purchased with a maturity of three months or less.

SEGMENT REPORTING: Operating segments are revenue-producing components of the
Partnership for which separate financial information is produced internally for
management. Under the definition, NERA operated, for all periods presented, as a
single segment.


                                       5
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COMPREHENSIVE INCOME: Comprehensive income is defined as changes in partners'
equity, exclusive of transactions with owners (such as capital contributions and
dividends). NERA did not have any comprehensive income items in 2002 and 2001,
other than net income as reported.

INCOME PER UNIT: Net income per unit has been calculated based upon the weighted
average number of units outstanding during each year presented. The Partnership
has no dilutive units and, therefore, basic net income per unit is the same as
diluted net income per unit.

CONCENTRATION OF CREDIT RISKS AND FINANCIAL INSTRUMENTS: The Partnerships'
properties are located in New England, and the Partnerships are subject to the
general economic risks related thereto. No single tenant accounted for more than
5% of the Partnerships' revenues in 2002 or 2001. The Partnerships make their
temporary cash investments with high-credit-quality financial institutions or
purchase money market accounts invested in U.S. Government securities or mutual
funds invested in government bonds. At June 30, 2002, substantially all of the
Partnerships' cash and cash equivalents were held in interest-bearing accounts
at financial institutions, earning interest at rates from 1.18% to 1.8%. At
June 30, 2002 and 2001, approximately $16,400,000 and $16,000,000 of cash and
cash equivalents exceeded federally insured amounts.

ADVERTISING EXPENSE: Advertising is expensed as incurred. Advertising expense
was $38,684 and $33,865 for the six months ended June 30, 2002 and 2001,
respectively.

NOTE 2--RENTAL PROPERTIES

As of June 30, 2002, the Partnership and its Subsidiary Partnerships owned 2,192
residential apartment units in 21 residential and mixed-use complexes
(collectively, the "Apartment Complexes"). The Partnership also owns 19
condominium units in a residential condominium complex, all of which are leased
to residential tenants (collectively referred to as the "Condominium Units").
The Apartment Complexes and Condominium Units are located primarily in the
greater metropolitan Boston, Massachusetts area.

Additionally, as of June 30, 2002, the Subsidiary Partnerships owned commercial
shopping centers in East Hampton, Connecticut and Framingham, Massachusetts.
These properties are referred to collectively as the "Commercial Properties."

On June 17, 2002, the Partnership purchased a 69 unit residential apartment
complex located in Norwood, Massachusetts for $7,200,000. The Partnership
assumed a first mortgage of approximately $3,650,000 with an interest rate of
7.08%, amortizing over 25 years and maturing in 2007. The seller financed
$1,726,898 at an interest rate of 6%, interest only, for 5 years. This seller
financed note is collateralized by a mortgage on the previously unencumbered 19
condominium units described above. The balance of approximately $1,800,000 was
funded from cash reserves.

On June 28, 2002, the Partnership sold a condominium unit located in Brockton,
Massachusetts for $113,000. The net gain on the sale is $92,778 after deducting
basis, a 3% sales commission to the management company (see Note 3), and other
closing costs. The net cash flow to the Partnership was $104,494.


                                       6
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 2--RENTAL PROPERTIES (CONTINUED)

Rental properties consist of the following:

<TABLE>
<CAPTION>

                                                        JUNE 30,             DECEMBER 31,              USEFUL
                                                          2002                  2001                    LIFE
                                                      ------------           ------------            -----------
<S>                                                   <C>                    <C>                     <C>
Land, improvements, and parking lots                  $ 17,721,662           $ 16,185,485            10-31 years
Buildings and improvements                              84,880,105             78,671,755            15-31 years
Kitchen cabinets                                         1,771,788              1,646,814             5-10 years
Carpets                                                  1,720,555              1,578,655             5-10 years
Air conditioning                                           217,372                184,735             7-10 years
Laundry equipment                                           49,577                 43,802              5-7 years
Elevators                                                  177,972                175,557               20 years
Swimming pools                                              84,048                 80,198               10 years
Equipment                                                1,984,301              1,082,807              5-7 years
Motor vehicles                                              90,543                 90,543                5 years
Fences                                                      57,229                 39,654             5-10 years
Furniture and fixtures                                     630,632                584,046              5-7 years
Smoke alarms                                                76,149                 54,338              5-7 years
                                                      ------------           ------------
                                                       109,461,933            100,418,389
Less accumulated depreciation                           28,617,500             26,477,291
                                                      ------------           ------------
                                                      $ 80,844,433           $ 73,941,098
                                                      ============           ============
</TABLE>


NOTE 3--RELATED PARTY TRANSACTIONS

The Partnerships' properties are managed by an entity which is owned by the
majority shareholder of the General Partner. The management fee is equal to 4%
of rental revenue and laundry income. Total fees paid were approximately
$603,000 and $558,000 for the six months ended June 30, 2002 and 2001,
respectively. Security deposits are held in escrow by the management company
(see Note 6). The management company also receives a mortgage servicing fee
equal to an annual rate of 1/2% of the monthly outstanding balance of mortgages
receivable resulting from the sale of property. There was no mortgage servicing
fee paid in the year ended December 31, 2001 or the six months ended June 30,
2002.

The Partnership Agreement also permits the General Partner or management company
to charge the costs of professional services (such as counsel, accountants and
contractors) to NERA. During the six months ended June 30, 2002 and 2001
approximately $369,000 and $324,000 was charged to NERA for legal, construction,
maintenance, rental and architectural services and supervision of capital
improvements. Approximately $155,000 and $98,000 was capitalized during the six
months ended June 30, 2002 and 2001 in rental properties. Included in the 2002
expenses referred to above, approximately $118,000 is recorded in repairs and
maintenance and $96,000 in administrative expense. Included in the 2001 expenses
referred to above, approximately $95,000 is recorded in


                                       7
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 3--RELATED PARTY TRANSACTIONS (CONTINUED)

repairs and maintenance, $91,000 in administrative expense, and $41,000 in
renting expense. Additionally in each of the six months ended June 30, 2002 and
2001 the Partnership paid to the management company $40,000, for in-house
accounting services, which were previously provided by an outside company.
Included in accounts payable and accrued expenses at June 30, 2002 and December
31, 2001 is $149,784 and $155,206 due to the management company. The Partnership
Agreement entitles the General Partner or the management company to receive
certain commissions upon the sale of Partnership property, only to the extent
that total commissions do not exceed 3%. During the six months ended June 30,
2002, the Partnership paid a commission of $3,390 to the management company on
the sale of the condominium in Brockton (see Note 2). No commissions were paid
during the year ended December 31, 2001.

In 1996, prior to becoming an employee and President of the management company,
the current President performed asset management consulting services to the
Partnership. This individual continues to perform this service and to receive an
asset management fee from the Partnership, receiving $25,000 for the six months
ended June 30, 2002 and $50,000 for the year ended December 31, 2001.

Included in prepaid expenses and other assets were amounts due from related
parties of approximately $1,078,000 at June 30, 2002 and approximately
$1,038,000 at December 31, 2001, respectively, representing Massachusetts tenant
security deposits which are held for the Partnerships by another entity also
owned by one of the shareholders of the General Partner (see Note 6).

On November 8, 2001, the Partnership, the majority shareholder of the General
Partner and the President of the management company formed a limited liability
company to purchase a 40-unit apartment building in Cambridge, Massachusetts.
The ownership percentages are 50%, 47 1/2% and 2 1/2%, respectively. As part of
this transaction, the Partnership advanced funds in excess of its 50% percent
interest and received interest income on this excess, at 8%. A mortgage of
approximately $8,000,000 was taken out on this property on December 27, 2001,
and the funds in excess of the required equity were returned to the members in
proportion to their ownership interest so their respective capital contributions
are currently proportionate to their ownership interest. The interest income
paid to the Partnership in 2001 was $30,003.


NOTE 4--OTHER ASSETS

Included in prepaid expenses and other assets at June 30, 2002 and December 31,
2001 is approximately $730,000 and $552,000, respectively, held in escrow to pay
future capital improvements.

Financing and leasing fees of $806,046 and $816,414 are net of accumulated
amortization of $1,232,779 and $1,157,600 at June 30, 2002 and December 31,
2001, respectively.


                                       8
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 5--MORTGAGES PAYABLE

At June 30, 2002 and December 31, 2001, the mortgages payable consisted of
various loans, all of which were secured by first mortgages on properties
referred to in Note 2. At June 30, 2002, the interest rate on these loans ranged
from 6.0% to 8.78%, payable in monthly installments aggregating approximately
$632,000, including interest, to various dates through 2016. Although the
majority of loans mature within ten years, they are being amortized on a basis
between 25 and 27.5 years. The majority of the mortgages are subject to
prepayment penalties. See Note 12 for fair value information.

The Partnerships have pledged tenant leases as additional collateral for certain
of these mortgages.

Approximate annual maturities are as follows:

<TABLE>
          <S>                                <C>
          2003-current maturities            $   905,000
          2004                                   969,000
          2005                                 3,540,000
          2006                                10,515,000
          2007                                 2,596,000
          Thereafter                          66,053,000
                                             -----------
                                             $84,578,000
                                             ===========
</TABLE>


NOTE 6--ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The lease agreements for certain properties require tenants to maintain a
one-month advance rental payment plus security deposits. Security deposits are
held by another entity owned by the majority shareholder of the General Partner
(see Note 3).


                                       9
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 7--PARTNERS' CAPITAL

The Partnership has two categories of Limited Partnership units (Class A and B)
and one category of General Partnership units (General Partner). Under the terms
of the Partnership Agreement, Class B units and General Partnership units must
represent 19% and 1%, respectively, of the total units outstanding. All classes
have equal profit-sharing and distribution rights in proportion to their
ownership interests.

In February 2002, the Partnership voted to change its dividend policy from
semi-annual to quarterly and declared a quarterly dividend of $6.40 per unit,
payable on March 31, 2002. On May 6, 2002, the Partnership declared a dividend
of $6.40 per unit payable on June 30, 2002. The Partnership declared
distributions of $17.70 per unit in 2001.

The Partnership has entered into a deposit agreement with an agent to facilitate
public trading of limited partners' interests in Class A units. Under the terms
of this agreement, the holders of Class A units have the right to exchange each
Class A unit for 10 Depositary Receipts. The following is information on the net
income per Depositary Receipt:

<TABLE>
<CAPTION>

                                                          SIX MONTHS ENDED
                                                              JUNE 30,
                                                        -------------------
                                                        2002           2001
                                                        ----           ----
  <S>                                                   <C>            <C>
  Net Income per Depositary Receipt                     $2.18         $1.79
                                                        =====         =====
</TABLE>


NOTE 8--TREASURY UNITS

Treasury units at June 30, 2002 are as follows:

Class A                       5,681
Class B                       1,228
General Partnership              64
                              -----
                              6,973
                              =====


NOTE 9--COMMITMENTS AND CONTINGENCIES

From time to time, the Partnerships are involved in various ordinary routine
litigation incidental to their business. The Partnerships are not involved in
any material pending legal proceedings.

The Partnership has committed, subject to final approvals, to construct 20
additional residential units at the Westgate Apartments in Woburn,
Massachusetts. The total cost of these units will be approximately $3,500,000,
to be funded from cash reserves.


                                       10
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 10--RENTAL INCOME

During the six months ended June 30, 2002, approximately 91% of rental income
was related to residential apartments and condominium units with leases of one
year or less. The remaining 9% was related to commercial properties which have
minimum future rental income on noncancellable operating leases as follows:

<TABLE>
<CAPTION>

                                                    Commercial
                                                 Property Leases
                                                 ---------------
               <S>                                <C>
               2003                               $ 2,085,000
               2004                                 2,086,000
               2005                                 1,720,000
               2006                                 1,405,000
               2007                                 1,314,000
               Thereafter                           7,916,000
                                                  -----------
                                                  $16,526,000
                                                  ===========
</TABLE>


The aggregate minimum future rental income does not include contingent rentals
which may be received under various leases in connection with percentage rents,
common area charges and real estate taxes. Aggregate contingent rentals were
approximately $321,000 for the six months ended June 30, 2002 and $461,000 for
the year ended December 31, 2001, respectively.

Rents receivable are net of allowances for doubtful accounts of $199,122 and
$77,752 at June 30, 2002 and December 31, 2001, respectively.


NOTE 11--CASH FLOW INFORMATION

During the six months ended June 30, 2002 and 2001, cash paid for interest was
$3,199,500 and $3,216,000 respectively.

Non-cash investing and financing activities were as follows:

<TABLE>
<CAPTION>

                                                                      6 Months Ended
                                                                      June 30, 2002
                                                                      --------------
         <S>                                                          <C>
         1st Mortgage assumed on Norwood acquisition                    $3,643,128
         Mortgage issued to seller of Norwood property                   1,726,898
                                                                        ----------
         Total non cash investing and financing activity                $5,370,026
                                                                        ==========
</TABLE>


                                       11
<PAGE>


       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 12--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Partnership in estimating
the fair value of its financial instruments:

Cash and cash equivalents, other assets, investment in partnerships, accounts
payable, and advance rents and security deposits: Fair value approximates the
carrying value of such assets and liabilities.

Mortgage notes payable: Fair value is generally based on estimated future cash
flows discounted using the quoted market rate for an independent source of
similar obligations. Refer to the table below for the carrying amount and
estimated fair value of such instruments.

<TABLE>
<CAPTION>

                                         At June 30, 2002                          At December 31, 2001
                                    ---------------------------                 ---------------------------
                                    Carrying         Estimated                  Carrying         Estimated
                                    Amount           Fair Value                 Amount           Fair Value
<S>                                 <C>              <C>                        <C>              <C>
Mortgage notes payable              $84,578,053      $88,560,611                $79,613,051      $83,864,053
</TABLE>


NOTE 13--TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership is different than financial
statement income because of accelerated depreciation, different tax lives, and
timing differences related to prepaid rents and allowances. Taxable income is
approximately $250,000 greater than statement income for the six months ended
June 30, 2002 and approximately $500,000 greater than statement income for the
year ended December 31, 2001 because of depreciation differences, non-deductible
allowances and an increase in tenants' prepaid rental deposits. The cumulative
tax basis of the Partnership's real estate at June 30, 2002 is approximately
$2,200,000 greater than the statement basis.


NOTE 14--SUBSEQUENT EVENT - SALE OF EAST HAMPTOM LP SHOPPING MALL

On July 16, 2002, the Partnership executed a purchase and sale agreement for the
sale of the East Hampton LP shopping mall located in East Hampton, Connecticut
for $3,025,000. The completed sale is subject to inspections and other due
diligence by the prospective buyer. The gain on the sale will be approximately
$1,200,000 after deducting basis, a 3% sales commission to the management
company (Note 3), and other estimated expenses of the sale. The net cash flow to
the Partnership will be approximately $1,600,000 after payment of the existing
mortgage and estimated selling expenses. For the year ended December 31, 2001,
this property contributed approximately 2% of rental income and less than 1% of
cash flow from operations.


                                       12
<PAGE>


Item 2-- MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

The following discussion should be read in conjunction with the financial
statements and notes thereof appearing elsewhere in this report. This Report
on Form 10-Q contains forward-looking statements within the meaning of the
securities laws. Actual results or developments could differ materially from
those projected in such statements as a result of certain factors set forth
in the section below entitled "Factors That May Affect Future Results" and
elsewhere in this Report.

RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2002 to the three months ended
June 30, 2001.

The Partnership and its Subsidiary Partnership earned income from operations
of $1,703,265 during the three months ended June 30, 2002 compared to
$1,394,174 for the three months ended June 30, 2001, an increase of $309,091
(22%). The primary factor contributing to the increase was the continued
strength in the Partnership's residential real estate in the second quarter
of 2002 compared to the prior year and an increase in rental rates at certain
of the Partnership's properties.

The rental activity is summarized as follows:

<TABLE>
<CAPTION>

                                                     Occupancy Date
                                      July 31,         December 31,           June 30,
                                       2002                2001                 2001
---------------------------------------------------------------------------------------------
<S>                                  <C>                <C>                   <C>
Residential
Units.....................             2,211               2,143                2,143
Vacancies.................                42                  23                   39
Vacancy rate..............               1.9%                1.0%                 1.8%

Commercial
Total square feet.........           137,775             137,775              137,775
Vacancy...................                 0                   0                    0
Vacancy rate..............                 0                   0                    0
--------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                         Rental Income (in thousands)
                                     2002                            2001
--------------------------------------------------------------------------------------------
<S>                               <C>                             <C>
Total rents.................      $  7,307                        $6,764
Residential percentage......            91%                           91%
Commercial percentage.......             9%                            9%
Contingent rentals..........      $    115                        $  124
</TABLE>


                                       13
<PAGE>


Rental income for the three months ended June 30, 2002 was $7,307,059 compared
to $6,763,514 for the three months ended June 30, 2001, an increase of $543,545
(8%). This increase is attributable to increases in rental rates at the
Partnership's residential properties. Although the rental rates have remained
relatively unchanged during the three months ended June 30, 2002, the
Partnership is realizing the benefits of the rental rate increases from the
third and fourth quarter of 2001. Vacancies remained relatively unchanged during
the three month period ended June 30, 2002. Significant improvements were made
in 2001 to the Partnership's properties at 62 Boylston Street and 1144
Commonwealth Avenue, both of which resulted in rental income increases in excess
of 10%. Rental income from the Partnership's residential properties represent
approximately 91% of total rental income at both June 30, 2001 and 2002.

Expenses for the three months ended June 30, 2002 were $5,664,823 compared to
$5,437,660 for the three months ended June 30, 2001, an increase of $227,163
(4%). Renting expenses for 2002 have increased $51,652 (181%), substantially
consisting of real estate commissions paid by the Partnership to unaffiliated
parties. During the first six months of 2001, the rental real estate market was
fairly strong and the Partnership paid less commissions than in 2002. The rental
market has weakened in 2002 resulting in higher tenant turnover and a slight
increase in vacancies. In an effort to sustain occupancy levels, commissions
paid to unaffiliated leasing agents has increased. This has resulted in a
significant increase in renting expenses in 2002. Taxes and insurance increased
$157,024 (26%) due to increases in real estate taxes from reassessments and
increased insurance premiums. Depreciation and amortization increased $107,968
(10%) due to ongoing capital improvements to the Partnership properties.
Management fees increased $17,417 (6%) due to the increase in rental income.
Operating expenses decreased $43,138 (7%) due to decreased heating oil costs and
a milder winter in 2002 compared to 2001. Administrative expenses decreased
$51,957 (14%) due to a decrease in professional fees. In 2001, the Partnership
was involved in some special projects which resulted in higher legal fees in
2001. These projects were completed in 2001. Repairs and maintenance expenses
remained relatively unchanged.

Interest income decreased $83,582 (54%) substantially due to a decline in the
interest rates. The Partnership sold a condominium unit in June 2002 resulting
in a gain of $92,778.

As a result of the changes discussed above, net income for the three months
ended June 30, 2002 was $1,863,553 compared to $1,549,091 for the three months
ended June 30, 2001, an increase of $314,462 (20%).


                                       14
<PAGE>


The Partnership and its Subsidiary Partnerships earned income from operations
of $3,550,695 during the six months ended June 30, 2002 compared to
$2,736,075 for the six months ended June 30, 2001, an increase of $814,620
(30%). For the six months ended June 30, 2002, rental income was $14,662,968
compared to $13,415,001 for the six months ended June 30, 2001, an increase
of $1,247,967 (9%).

The following is a summary of the Partnership's rental income for the six months
ended June 30, 2002 and 2001:

<TABLE>
<CAPTION>

                                          RENTAL INCOME (IN THOUSANDS)
                                          ----------------------------
                                                Six Months Ended
                                                     June 30,
                                              2002            2001
                                              ----            ----
<S>                                          <C>             <C>
Total rents...........................       $14,663         $13,415
Residential percentage................            91%             91%
Commercial percentage.................             9%              9%
Contingent rentals....................       $   237         $   270
</TABLE>

As demonstrated above, the primary source of the Partnership's revenue is from
the residential properties. Rental rates in effect during the six months ended
June 30, 2002 are higher than the comparable period and occupancy rates have
remained relatively stable.

Expenses for the six months ended June 30, 2002 were $11,235,462 compared to
$10,809,812 for the six months ended June 30, 2001, an increase of $425,650
(4%). The reasons for such increases are the same as discussed above. Major
increases were: depreciation and amortization $139,411 (6%); taxes and
insurance $299,158 (25%) and renting expenses $90,307 (6%). The increases
were partially offset by a decrease in operating expenses of $199,101 (14%).

Included in other income for the six months ended June 30, 2002 is a gain of
$92,778 on the sale of the condominium in Brockton, Massachusetts. Interest
income decreased $229,306.

As a result of the changes discussed above, net income for the six months ended
June 30, 2002 was $3,771,479 compared to $3,103,020 for the six months ended
June 30, 2001, an increase of $668,459 (21%).


                                       15
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

The Partnership's principal source of cash during 2002 and 2001 was the
collection of rents.

The majority of cash and cash equivalents of $16,789,882 at June 30, 2002 and
$16,690,943 at December 31, 2001 was held in interest bearing accounts at credit
worthy financial institutions.

This increase of $98,939 is summarized as follows:

<TABLE>
<CAPTION>

                                                                Six months ended June 30,
                                                              2002                   2001
                                                           -----------            -----------
<S>                                                        <C>                    <C>
Cash provided by operating activities                      $ 5,898,631            $ 5,264,820
Cash (used in) investing activities                         (3,179,858)            (1,216,283)
Cash (used in) financing activities                         (2,619,834)            (2,295,374)
                                                           -----------            -----------
Net increase in cash and cash equivalents                  $    98,939            $ 1,753,163
                                                           ===========            ===========
</TABLE>

The increase in cash provided by operating activities is primarily due to the
increase in operating income before depreciation expense. The decrease in cash
from investing activities is due to a reduction in cash reserves available for
investment as a result of the acquisition of the rental property in Norwood,
Massachusetts in June 2002 (discussed below) as well as the capital improvements
to certain of the Partnership's properties. The decrease in cash used in
financing activities is due to the dividend distribution and reduction in
mortgage debt.

On June 17, 2002 the Partnership purchased a 69 unit residential apartment
complex located in Norwood, Massachusetts for $7,200,000. The Partnership
assumed a first mortgage of approximately $3,650,000 with an interest rate of
7.08%, amortizing over 25 years and maturing in 2007. The seller financed
$1,726,898 at an interest rate of 6%, interest only, for 5 years, which is
secured by a mortgage on 19 condominium units owned by the Partnership. The
balance of approximately $1,800,000 was funded from cash reserves.

On June 28, 2002, the Partnership sold a condominium located in Brockton,
Massachusetts for $113,000. The net gain on the sale was $92,778 and the net
cash flow to the Partnership was $104,494.

In February 2002, the Partnership voted to change its dividend policy from a
semi-annual to a quarterly distribution and declared a quarterly dividend of
$6.40 per Unit, payable on March 31, 2002 and June 30, 2002. Total dividends
paid in 2001 were $17.70 per unit.


                                       16
<PAGE>


On November 8, 2001, the Partnership, the major shareholder of the General
Partner and the President of the management company formed a limited
liability company to purchase a 40-unit residential property in Cambridge,
Massachusetts. The ownership percentages are 50%, 47 1/2%, and 2 1/2%,
respectively. As part of this transaction, the Partnership initially advanced
funds in excess of its 50% interest and received interest income on this
excess, at 8%. This interest income totaled $30,003 in 2001. The excess
amount was repaid to the Partnership upon the closing of new financing for
this property in 2001, so no such interest will be received in 2002.

During the six months ended June 30, 2002, the Partnership completed certain
improvements to their properties at a total cost of approximately $1,597,000.
The most significant improvements were made at the following properties:
$1,207,613 at 62 Boylston Street in Boston, Massachusetts; $55,075 at the North
Beacon Street Apartments in Brighton, Massachusetts; $53,177 at Redwood Hills
Apartments in Worcester, Massachusetts; and $48,236 at the Hamilton Oaks
Apartments in Brockton, Massachusetts. Additionally, the Partnership has
expended approximately $90,000 on pre-construction costs associated with the
Westgate Apartments expansion.

In addition to the improvements made to date in 2002, the Partnership plans to
invest approximately $2,000,000 in capital improvements during the balance of
2002, the majority of which will be spent at 62 Boylston Street. These
improvements will be funded from escrow accounts established in connection with
the refinancing of the applicable properties, as well as from the Partnership's
cash reserves.

The Partnership intends to construct 20 additional residential units at the
Westgate Apartments in Woburn, Massachusetts. Presently the Partnership has
received approval from the conservation commission and is awaiting planning
board approvals. The cost is estimated to be $3,500,000, which will be funded
from cash reserves.

On July 16, 2002, the Partnership executed a purchase and sale agreement for
the sale of the East Hampton LP shopping mall located in East Hampton,
Connecticut for $3,025,000. The completed sale is subject to inspections and
other due diligence by the prospective buyer. The gain on the sale will be
approximately $1,200,000 after deducting basis, a 3% commission to the
management company (Note 3), and other estimated expenses of the sale. The
net cash flow to the Partnership will be approximately $1,600,000 after
payment of the existing mortgage and estimated selling expenses. For the year
ended December 31, 2001, this property contributed approximately 2% of rental
income and less than 1% of cash flow from operations.

                                       17
<PAGE>


Factors That May Affect Future Results

Certain information contained herein includes forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Liquidation Reform Act of 1995 (the "Act"). While forward looking statements
reflect management's good faith beliefs when those statements are made, caution
should be exercised in interpreting and relying on such forward looking
statements, the realization of which may be impacted by known and unknown risks
and uncertainties, events that may occur subsequent to the forward-looking
statements, and other factors which may be beyond the Partnership's control and
which can materially affect the Partnership's actual results, performance or
achievements for 2002 and beyond.

Along with risks detailed from time to time in the Partnership's filings with
the Securities and Exchange Commission, some factors that could cause the
Partnership's actual results, performance or achievements to differ materially
from those expressed or implied by forward-looking statements include but are
not limited to the following:

         o        The Partnership depends on the real estate markets where its
                  properties are located and these markets may be adversely
                  affected by local economic and market conditions, which are
                  beyond the Partnership's control.

         o        The Partnership is subject to general economic risks affecting
                  the real estate industry, such as dependence on tenant's
                  financial condition and the need to enter into new leases or
                  renew leases on terms favorable to tenants in order to
                  generate rental revenues.

         o        The Partnership is subject to increases in heating and utility
                  costs that may arise as a result of economic and market
                  conditions.

         o        The Partnership may fail to identify, acquire, construct, or
                  develop additional properties; may develop properties that do
                  not produce a desired yield on invested capital; or may fail
                  to effectively integrate acquisitions of properties or
                  portfolios of properties.

         o        Financing or refinancing of Partnership properties may not be
                  available to the extent necessary or desirable, or may not be
                  available on favorable terms.

         o        Given the nature of the real estate business, the Partnership
                  is subject to potential environmental liabilities, although
                  management is not aware of any material environmental
                  liabilities at this time.

         o        Market interest rates could adversely affect the market prices
                  for Class A Partnership Units and Depositary Receipts as well
                  as performance and cash flow.

The foregoing factors should not be construed as exhaustive or as an admission
regarding the adequacy of disclosures made by the Partnership prior to the date
hereof or the effectiveness of said Act. The Partnership expressly disclaims any
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.


                                       18
<PAGE>


The residential real estate market in the Greater Boston area has softened and
the Partnership anticipates the climate will remain the same in the foreseeable
future. This may result in increases in vacancy rates and/or a reduction in some
rents. Despite this change in the market, the Partnership does not foresee a
significant effect on its cash flow. The Partnership believes its present cash
reserves as well as anticipated rental revenue will be sufficient to fund its
current operations and to finance current and planned improvements to its
properties.

Since the Partnership's long-term goals include the acquisition of additional
properties, a portion of the proceeds from the refinancing and sale of
properties is reserved for this purpose. The Partnership will consider
refinancing existing properties if the Partnership's cash reserves are
insufficient to repay existing mortgages or if the Partnership need additional
funds for future acquisitions.


Item 3--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2002, the Partnership and its subsidiary Partnerships
collectively have approximately $84,578,000 in long-term debt, all of which pays
interest at fixed rates. Accordingly, the fair value of these debt instruments
is affected by changes in market interest rates. For information regarding the
fair value and maturity dates of these debt obligations, see Notes 5 and 12 to
the Consolidated Financial Statements.

For additional disclosures about market risk, see "Item 2 - Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Factors that May Affect Future Results."


Item 6--EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are filed herewith:

Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350
Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350


                                       19
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Date:  August 14, 2002

                                             NEW ENGLAND REALTY ASSOCIATES
                                             LIMITED PARTNERSHIP

                                             By: NEW REAL, INC.,
                                                 its General Partner*


                                             By: /s/ Ronald Brown
                                                 -----------------------
                                                 Ronald Brown, President


                                           * Functional equivalent of Chief
                                             Executive Officer, Principal
                                             Financial Officer and Principal
                                             Accounting Officer



                                       20