Worcester Business Journal

22 2020 Economic Forecast • Worcester Business Journal • www.wbjournal.com Worcester's rent hikes surpassed Boston, where rents for the first 10 months of the year swelled by 3.5%, and more than doubled the national average of 2.9%. At $1,681, average monthly rents in Worcester were above the national norm of $1,412, but well behind Boston's average of $2,366, the survey found. The RealPage study is in sharp con- trast to the online data firm Apartment List's findings in October finding year- over-year rents in Worcester increased by 0.8%. The California-based firm uses apartment listings and U.S. Census Bureau data to compile its reports. The RealPage survey data is based on a sample of 8,800 units. Nearly 90% of the RealPage apartments surveyed are the same properties tracked over time. Adam Couch, a RealPage market ana- lyst, said Worcester is in the midst of the perfect storm to drive rents. The city's stable economy, as well as a high concentration of health, education, and biotech jobs are drawing people to the city, and fueling rents, he said. "The medical and biotech industries continue to anchor the market and bol- ster the local economy," Couch said. "As a result of these typically higher-paying jobs and low inventory, landlords have increased rents to record levels." Nearly 400 units are under construc- tion in the city, most of which will be delivered next year. Those apartments are expected to boost Worcester's inven- tory by 0.7%, the report said. In the meantime, Pasquale said noth- ing stays on the market very long. In late November, there were 94 apartments listed for rent in Worcester on the MLS Property Information Network, the Shrewsbury listing service. At the low end is a 600-square-foot, one-bedroom apartment on Paine Street for $875. The most expensive apartment is an eight-room unit at the new Junction Shop Lofts at the former mill property on Beacon Street featuring four bedrooms, washer/dryer, granite countertops, stainless steel kitchen, and a fireplace for $2,600 per month. Pasquale said landlords don't need to hire real estate agents because an owner can put a sign in the yard and people will flock. He cited a handful of reasons for the apartment crunch. In addition to the lack of inventory, fewer people are owning. "Millennials are not buying because they don't play to stay put," Pasquale said. Among the new tenants in the down- town in places like 145 Front at City Square, where rents range from $1,450 for a studio to $2,700 for a two-bed- room, are for renters who work in Boston but can't afford to live there because rents are twice as high, he added. New Jersey-based Roseland Residential Trust, a subsidiary of Mack- Cali Realty Corp., built the 365 resi- dences with 10,000 square feet of ground-floor retail. >> Prices of Worcester triple deckers up 19% this year It's been a good year for sellers of multi-family homes in Worcester, according to data from The Warren Group, the Peabody-based market tracker. From January through October, the volume of two- and three-family homes sold in the city increased by 7% com- pared to the same period a year ago. As sales rose, so did prices. The median price for a two-family home reached $260,750 this year, up from $251,600 for the same period a year ago, a nearly 4 percent hike. But it was the price of triple deckers that really took off. Median prices for three-family homes rose by 19% to $336,750 for the first 10 months of the year, up from $283,250 in 2018. "There's lots of interest in multis, and there's lots of interest in Worcester from Boston buyers," said Arthur Berry, a bro- ker at 1 Worcester Homes. "There's lots of optimism because of the Worcester Red Sox stadium being built; and there's a sense that Worcester is turning around, and they want to invest here." Klaudia Dang, a sales agent with Keller Williams in Worcester, said she's seeing lots of first-time homebuyers who want to be owner-occupants. One of the biggest drivers of sales, she said, is rising rents. "Rents are so high it's better to own," she said. The average rent for an apartment in Worcester is $1,392, a 3% increase com- pared to the previous a year ago, according to RentCafe, an online nationwide listing service. Consider these prices: • At 145 Front Street at City Square, the new 365-unit complex downtown, advertised rents ranging from $1,460 for a 500-square-foot studio to $2,175 for a 1,000-square-foot two-bedroom unit. ngrid.com Connect with us on We're investing and innovating for our communities energy future. To p re s i d e n t i a l re a l e s t a t e s t o r i e s i n 2 0 1 9 Continued from Page 21 Knowledge + Experience + Trusted Advice. It all adds up. Large enough to serve the needs of most businesses and individuals; small enough to offer the personal attention you expect and deserve. Greenberg, Rosenblatt, Kull & Bitsoli, PC Certified Public Accountants 306 Main Street, Suite 400 • Worcester, MA 01608 508.791.0901 • www.grkb.com The 145 Front Street development in Worcester added luxury units to the market. P H O T O / 1 4 5 F R O N T S T R E E T

• Cover