Worcester Business Journal

www.wbjournal.com • Worcester Business Journal • 2 020 Economic Forecast 21 R E S I D E N T I A L R E A L E S TAT E W P otential homebuyers hoping for prices to ease and inventories to rise in 2020 will be disap- pointed. While the home price hikes vary by community, they are trending upward. These high prices have not just discour- aged many first-time home buyers. Potential trade-up customers, who would feed inventory when their sell their four-bedroom Colonial, are side- lined. While they can reap the benefits of buying low and selling high, many cannot afford to purchase a home in this expensive market. Prices putting homes out of reach. For example, in Middlesex County, the median sales price of a single-family home from January through November rose by just 2%, according to The Warren Group, the Peabody real estate market tracker. But at $535,000, the median price in one of those 81 cities and towns is out of reach for many fam- ilies. In Worcester County, the year-over- year median cost for a single-family home from January through November increased by 5.5% to $290,000, up from $275,000. The market will have low inventory. The biggest factor driving prices is the lack of homes and condos for sale. That's not expected to change in 2020. Consider these numbers from the Massachusetts Association of Realtors: In September, frequently the month with the highest number of homes for sale, there were 14,129 single-family houses for sale in Massachusetts. Sounds like a lot, since buyers only need one. But during the same month five years ago, MAR reports 23,355 homes were listed by Bay State brokers. In Worcester County, more than twice as many single-family homes were for sale in 2014 at 4,059 compared to less than 2,000 in September of this year. Mortgage interest rates will remain low. The amount homebuyers pay for a home loan is a factor in buying a home. A mortgage for a $300,000 home at 3.5% has a monthly principal and inter- est charge of $1,749. If that rate rises by 1 percent point, the payment increases by $173. While economists said rates were expected to rise in 2019, it turns out they fell from 4.5% in January to 3.7% by mid-December. At least seven inter- est rate watchers say rates are not expected to rise next year. Economists from the National Association of Realtor, the National Association of Home Buildiers, Freddie Mac, Fannie Mae and the Mortgage Bankers Association and Wells Fargo say the average 30-year fixed rate loan will be 3.7%. Home prices starting to get out of hand Low inventory of for-sale homes in Central Massachusetts will continue to drive prices higher BY THOMAS GRILLO Worcester Business Journal Staff Writer The Worcester County Courthouse development in Lincoln Square is expected to bring more affordable housing. Top residential real estate stories in 2019 Worcester real estate agent Lee Joseph at a Paxton home listed for sale in 2018. >> Home builders buy Hopkinton land for $9.1M for Legacy Farms buildout A home construction firm based in Atlanta has purchased more than 17 acres for $9.1 million for the further planned construction of a 425-home housing development in Hopkinton. According to Pulte Group of Atlanta, the firm is planning 48 single-family homes and 33 attached duplex homes on the parcel. The property transaction closed in January, according to state land records. Developer Roy MacDowell and his firm Baystone Development, master developers of the massive 700-acre development at the former site of Weston Nurseries, sold the property to Pulte Homes. The development fits within the larg- er master-planned community dubbed Legacy Farms, according to Julie Pulliam, a public relations manager for Pulte Group. The master development on the 700- acre former site of Weston Nurseries off of Route 135 includes other housing developments, retail space, office space and 500 acres of open space. At full build-out, there will be more than 1,100 housing units, according to Baystone Development. Pulte Group made another $9.1 mil- lion purchase in July 2017 for 13 acres of land. According to Hopkinton planning document, a master plan special permit for the project was first filed in 2010. >> Report: Worcester ranks among U.S. leaders in rent growth Worcester's apartment occupancy rate reached 98% in October as the pace of rising rents widened over downtown Boston, according to a new report from RealPage Inc. The Texas data provider to the real estate industry reported city rents grew by 7% from January through October. Only three other cities nationwide are growing rents at a faster rate than Worcester, the survey said. The annual rent hike in Phoenix was 8%, followed by Huntsville, Ala. at 7.6%, Bakersfield, Calif. saw rents rise by 7.5%, while Tucson was on par with Worcester. Adam Pasquale, a broker at his firm Witness Pro in Worcester, said he's not surprised. "Worcester is becoming unafford- able," Pasquali said. "A few years ago, a three-bedroom apartment on Vernon Hill cost $900. Today, those units are getting $1,400." RealPage researchers found A Paxton home listed for sale in 2018 for $1.4 million. Legacy Farms in Hopkinton Continued on Page 22 P H O T O / T M S A E R I A L S O L U T I O N S P H O T O / E D D C O T E P H O T O / E D D C O T E P H O T O / G O O G L E

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