Worcester Business Journal

wbjournal.com | May 11, 2020 | Worcester Business Journal 11 White said a shi to more online buying combined with a longer-term trend of industrial space being pushed out from inside the Route 128 belt will help the industrial market in farther-out areas like along I-495. As for hotels, CBRE expects a 30% decline in demand this year and a 10% drop in daily room rates. Demand won't recover until around the end of 2021, and room rates by 2022, the firm said. Malls will have vacancy rates increase by 5% to 6%. A major disruption in the hotel in- dustry could leave a mark on Worcester, where 262 rooms are planned for hotels across from the $132-million Polar Park baseball stadium – where construction has been halted during the pandemic – and a 105-room hotel is proposed for Washington Square. Reduced retail spending, and a shi to online, could complicate plans for a mixed-use redevelopment of Worcester's Greendale Mall, finding tenants for doz- ens of empty storefronts in and around downtown, and retail space planned next to Polar Park. Residential real estate e pandemic has caused a drop in new listings aer inventory has already tightened dramatically. "We really have a significant shortage of homes for sale here in Massachusetts," said Kurt ompson, the president of the Massachusetts Association of Realtors and a Realtor at Keller Williams Realty in Leominster. In March, roughly 8,374 homes were listed for sale across the state, ompson said. at's down from 12,486 in the pre- vious March and a fraction of the more than 38,000 homes listed at the height of the market in 2006. In the city of Worcester, 80 sin- gle-family homes were on the market in April, down from 104 a year ago, said Erika Hall, the president of the Realtors Association of Central Massachusetts. In February, listings were half of last year's number, at 57. "at was a crisis level," Hall said. Homes across Central Massachusetts are on the market for a fraction of the time they used to. Across 20 of the area's largest communities, 19 had averages of homes lasting more than 100 days in 2012, but by the start of this year, none of those communities had an average higher than 70 days. Another factor could combine with a low inventory to keep prices afloat: rock-bottom interest rates. "ey're historically low rates. How can you beat it?" Dermody said. "You can afford so much more." National mortgage loan company Fannie Mae is forecasting home refinanc- ing, which takes advantage of low rates, to jump $400 billion to $1.41 trillion compared to last year. But it is predicting a big decline in sales: 15% for 2020 com- pared to last year, it said in April. Realtors are adjusting to the pandem- ic by changing how they show homes. Hall has set up cameras in homes for 3D online showings, turning to brief walk- throughs only when necessary. Before, someone might sit at a kitchen table or on a sofa and picture how they'd feel living there, Hall said. at's not possible today. When walk- throughs are being conducted, some homeowners are leaving doors open and lights on so there's less anyone would need to touch. "You really just need to walk through quickly," she said. Residential real estate leaders are optimistic the late summer months will make up for a slow spring and early summer. e disruption now is health related, Dermody said, unlike the home market bubble bursting before the 2008 recession. "We stand a pretty good chance of coming out of this reasonably well," said Timothy Warren, the CEO of e Warren Group. Construction Beyond buying, selling and leasing real estate, COVID-19 has altered the timeline for completion of construc- tion projects. Polar Park construction has stopped – putting an April 2021 opening at risk – and College of the Holy Cross in Worcester has stopped work on two major projects, a $107-million per- forming arts center and the $30-mil- lion recreation center. Others have continued, including the Courthouse Los development with more than 100 units in Worces- ter's Lincoln Square, an $80-million building at Worcester Polytechnic Institute, and a $45-million office building going up in Westborough for the medical optics firm Olympus. "People are scrambling, for sure," said attorney David Fine, a partner at the Westborough offices of the firm Mirick O'Connell, who specializes in construction law and litigation. Sites where work has proceeded have had to take extra precautions, Fine said, including special washing stations and dedicating someone to oversee dis- tancing and other compliance. at's led to questions about who – the owner or the developer – will pick up extra costs. e same question is being asked of whether a builder could be liable for penalties for finishing a project late if it's because of a pandemic. A clause called force majeure, the le- gal term for an act out of one's control, has been oen invoked for extending construction timelines, Fine said. He's been advising clients on those terms as well as whether construction workers should be forced to show up on the job during a difficult time. "You're seeing a real variety in terms of contractors in how they approach this," he said. W Average days on the market The Central Massachusetts housing market has gotten increasingly tight in the years leading into the coronavirus pandemic. In January, before the pandemic hit, homes were listed for about one-fourth of the days they were in January 2012 — 45 days instead of 161, by the average of 20 of the region's largest communities. Source: Redfin Two homes on the market in Worcester (above and below) are among a shrinking number of homes listed for sale. Worcester had 80 single-family homes for sale in April, a month that usually kicks off a busy spring real estate season. Franklin 255 30 225 Sudbury 295 70 225 Leominster 224 28 196 Auburn 218 60 158 Hudson 181 33 148 Worcester 165 25 140 Ashland 167 28 139 Hopkinton 171 37 134 Maynard 159 41 118 Milford 155 37 118 Shrewsbury 145 38 107 Holden 123 28 95 Marlborough 160 69 91 Blackstone 118 32 86 Framingham 128 42 86 Gardner 152 68 84 Fitchburg 135 54 81 Natick 112 60 52 Acton 102 62 40 Leicester 57 57 0 Avg. days on the Avg. days on the Community market, Jan. 2012 market, Jan. 2020 Difference

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