The City of Worcester is home to the third-worst real estate market for renters in the United States, according to a recent study released by Forbes Advisor.
Forbes found that the Worcester, MA-CT Metro Area, which encompasses all of Worcester County and parts of northeast Connecticut, has the third most-competitive rental market in the country, based on data from the first quarter of 2023 through the first quarter of 2024. The report cites the city’s low vacancy rates and high median rent as the reason for its ranking as the number of housing units that are available for rent are becoming scarce in the heart of the Bay State.
Buy/sell, rent/lease residential &
commercials real estate properties.
Forbes found that the first and second-worst real estate markets for renters in the country were the metro areas Virginia Beach and New York City, respectively.
According to the report, Worcester has the second-lowest vacancy rate in the country. Only 1.7% of all available apartments in the area are currently unoccupied — well below the average vacancy rate of 6.3%.
Out of 100,000 households that are in Worcester, the study found an average of 94 units are currently available, making Worcester the seventh-worst area in the country regarding available houses for rent.
“With extremely low vacancy rates and some of the worst availability of rental units, Worcester metro area renters are battling a tough rental market,” the report reads.
The study also found that Worcester renters saw the third-highest increase in rental prices at $163 year over year. The median price for renting an apartment unit in Worcester is $1,995 — higher than the national average of $1,804.
In comparison, Forbes found that the Boston-Cambridge-Newton, MA-NH vacancy rate was 2.7% while rental prices increased by $200 year over year. The Department of Housing and Urban Development states that an acceptable vacancy rate for any metropolitan area in the United States is 5% — a rate that neither Worcester nor Boston currently have.
Local data supports Forbes’ claims
Leah Bradley, the director of programs of the Central Massachusetts Housing Alliance, told MassLive on Monday that Forbes’ data is accurate and is a sobering reminder that there is not enough market-rate and affordable housing for Massachusetts residents.
“A low vacancy rate and a high median rent, which Worcester currently has, are the primary indicators of a rise in homelessness,” Bradley said. “We are seeing folks with higher and higher incomes, those at or below $85,000, not being able to afford rent resulting in more households experiencing homelessness.”
According to Bradley, Worcester’s low vacancy rate and increasing median rents are the products of a housing market with high demand and low amounts of available housing stock. She said the demand for housing is so high right now that individuals with incomes at or above $85,000 are scrambling to rent any available units — including those specifically built for people who make incomes lower than them.
Additionally, Bradley said those currently living in market-rate apartments cannot move out to buy a house, as the price of single-family homes throughout Massachusetts continues to increase yearly.
A report released by RedFin in April found that the cost of a single-family home in Worcester increased from $260,000 to $451,000 over the past five years. Bradley said this combination of units being sold to bidders with the highest income, renters choosing to stay put because of unaffordable single-family housing units and the lack of additional market-rate and affordable housing are the main drivers for the low vacancy rates and increasing median rent that is fueling the housing crisis in Worcester and Massachusetts.
“We have seen a rise in seniors who entering the homeless system and college graduates who are unable to move out on their own,” Bradley said. “The result is increased homelessness, and middle-income families, our workforce, moving out of the state.”
What is the state doing about housing issues?
In an attempt to jump-start the construction of more housing, Gov. Maura Healey’s administration is searching for solutions to build more housing in the Bay State.
Healey and Lt. Governor Kim Driscoll have been pushing the state legislature to pass the Affordable Homes Act, a $4.12 billion housing bond bill filed in 2023 that would provide for the creation or preservation of 70,000 homes throughout the state. The bill has been referred to the House Committee on Bonding and has not received a full vote in the House or Senate.
In March, Healey announced in Worcester that the state set aside $1 million in grants that will go to cities and towns who are planning to redevelop office space into residential units. This includes the planned conversion of two buildings on Chestnut and Elm streets in Worcester into 198 market-rate apartments and 22 condos that will be rented to residents making 80% or less of the area’s median income.
Bradley said she supports Healey’s bill and initiatives but acknowledged that more must be done to address the housing crisis as more people experience homeless in Worcester year after year.
“We need to preserve existing low-income housing and produce more housing, especially of rental housing for our lower-income families and more importantly, we need all communities to welcome rental housing into their neighborhoods and help us solve this crisis,” she said. “This housing crisis has long-term economic impacts for our state and we need every community to do its part.”
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