Why Worcester?
Established as a town in 1722 and later founded as a city in 1848, Worcester Massachusetts is home to creations such as the Valentines Day card, the type-writer, and the first pressurized space suit. At the turn of the nineteenth century, Worcester was a hub for manufacturing and transportation. These industries attracted large numbers of primarily European, Syrian, and Armenian immigrants to the city. As an affordable solution to the quickly growing population, the three-decker home was invented. The local economy prospered well into the 20th century before tanking in the 1960s as industrial firms began to relocate to southern states due to competition. Flash forward to today, and the local economy, property values, and commerce are all rapidly improving as the heart of the commonwealth beats faster than ever.
According to Assumption College professor, Thomas White, who compiles data for the Worcester Economic Index using, “Bureau of Labor Statistics (BLS); employment; and unemployment data for the greater Worcester area (NECTA),” Worcester’s annualized growth rate was 3.1% during the third quarter of 2018. Professor White credits job growth and low unemployment for these results. In fact, Worcester’s 2018 total annualized index growth was 3.2%, or the greatest increase since the 1990s. While we are seeing slower gains in 2019, White attributes this to volatile stock market conditions and does not predict a recession. To put this into perspective, Worcester’s unemployment rate in April 2019 was 2.9%, while just ten years earlier in 2009 it was 9.9%. The average unemployment rate for 2019 in all of the United States is 3.6%.
Strong economic maturation over the past several years has created a residential housing market ripe with buyers looking to plant roots in a promising city and to invest in its growth. In fact, there are so many buyers that the demand has vastly outpaced the supply. The number of single-family homes listed on the market from September 2018 to September 2019 decreased 48% year-over-year. With only one hundred and six single-family homes listed in September 2019 (a 1.05 month supply), sellers are continuing to make financial gain on the sale of their property. On average, sellers are accepting an offer within thirty-one days of listing their property for sale and are receiving 100.79% of the list price. See chart below.
The number of multi-family homes listed on the market decreased by 55% from September 2018 to September 2019 year-over-year, and only fifty-three multi-family homes were listed in September 2019 (a 1.39 month supply). On average, sellers are accepting an offer within 22 days of listing their property for sale and are receiving 100% of the list price. See chart above. The multi-family market is seeing an influx of investors as the price-point in Worcester remains more affordable than the surrounding Boston market. With a 60% rental base already in place, the Worcester multi-family market is poised for growth.
Commercial real estate is also thriving as local government has dedicated funding and resources to a variety of special projects. The Urban Revitalization Plan is focused on ‘revitalizing underinvested properties in Worcester’s downtown’, while other projects/initiatives aim to fund new real estate developments, and promote cultural events. One such project is Polar Park. This 10,000 seat stadium is, “envisioned as the anchor of an 18-acre, $240-million redevelopment initiative” that will relocate the minor league Pawtucket Red Sox (Class AAA; International League) to Worcester. Construction for this project is underway, and should be open for the 2021 season. This site will include an office building with a roof-deck overlooking the park, two hotels across Madison Street, a 225 unit apartment complex, as well as retail stores and restaurants. MasDot is also working to redesign the Kelley Square intersection and create a roundabout that will hopefully solve current and future traffic congestion problems in the area.
Worcester has been home to successful companies like Polar Beverages, cultural institutions such as the Worcester Art Museum and numerous colleges and universities for over a century. These organizations have long attracted residents and visitors alike, but urban expansion has paved the way for a surge in new businesses and local attractions.
One sector that is currently booming is the restaurant industry. Sean Woods, along with co-owner and executive chef, Jared Forman, opened restaurant ‘Dead Horse Hill’ in 2018. Both were big names in the industry coming from the former Strip-T’s and Gramercy Tavern of Boston. Woods and Forman chose to open a farm-to-table style restaurant that offers fine dining while also creating an atmosphere that honored Worcester’s local history. Dead Horse Hill features original ceilings, hammered tin designs, and the name itself “harkens back to the hill on which the restaurant sits, that wore out the horses that traveled through early Worcester,”. Since then, other farm-to-table restaurants and unique eateries have opened including City Bar & Grill, Hangover Pub, Doughnuts and Draughts, and Simjang. When folks are finished chowing down, there are now many options for beer drinkers to quench their thirst at breweries including Greater Good Imperial Brew Co, Wormtown Brewery, Flying Dreams Brewing Co, Redemption Rock Brewing Co, and many more in Worcester’s surrounding towns.
Not only is Worcester emerging as a culinary trendsetter, but it is also undergoing a renaissance of it’s art community. Worcester Art Museum has been showcasing its works (38,000 pieces today) since 1898, and the Hanover Theatre has been entertaining guests under various names since 1904. Today, there is Pow! Wow! Worcester, a 10 day art festival that brings artists from around the globe to create urban art pieces. Since 2016, “POW! WOW! Worcester has curated over 115 pieces of public art... and now maintains the largest collection of murals in New England.” In 2018, Worcester PopUp, the birth child of city government and the Worcester Cultural Coalition (among other groups), opened a 3,500 square foot community space for “creative-based events”. The events at Worcester PopUp range from art galleries to musical & theatrical performances, workshops, and even yoga classes. It’s mission is to engage locals and foster a sense of community through its diverse offerings. The Black Box Theatre, a future theatre space for 295 guests, is set to open in Pow!Wow!’s adjoining building at 20 Franklin Street. The project broke ground in June 2019 and is scheduled to open to the public in 2020. The space will be the only experimental theatre in the city.
Worcester is gaining recognition nationally as the list of special projects and city developments continues to grow longer seemingly by the day. The city, “is seeing its stock rise so fast that it is outpacing just about every other small city in America and could find itself a case study for urban growth,” writes Aaron Schachter of WGBH. It will be interesting to see what Worcester looks like in a few years from now as so much change is already underway. In the meantime, be sure to check out our blog at https://www.thejarboegroup.com/blog-1 for all Worcester and Real Estate related news and updates.
Sources:
http://www.worcesterhistory.org/worcesters-history/
https://www.assumption.edu/sites/default/files/Worcester%20Economic%20Indicators%20Q1%202019.pdf
https://www.wgbh.org/dining-out/2018/01/16/best-restaurants-in-worcester
https://www.wbjournal.com/article/wbdc-breaks-ground-on-black-box-theatre
https://www.npr.org/2018/10/23/658263218/forget-oakland-or-hoboken-worcester-mass-is-the-new-it-town