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Worcester's Neighborhoods

Worcester is one of the hottest real estate markets in the country. The city has a population of 181,045 residents and provides access to a marketplace of over 8 million people within a 90-minute commute. The city is booming because it offers 12 institutions of higher education and has attracted a thriving community of businesses in technology, construction, retailing, financial services, and other major industries.

High Demand for Real Estate

As a result of the city's thriving business community, demand for local residential properties has exploded in recent years. According to data from Realtor.com, homes in the city sell within an average of just 18 days. On the lower end of the market, homes average around $250,000 for a small ranch that requires some improvements before people can move in. On the higher end of the market, homes around 3,000 square feet sell for around $600,000 or more.

High-End Residential Options

The city has long been known for its traditional Tudor-style mansions that were built in the early 1900s, but many custom homes have also been constructed in recent years. On the higher end of the market, residents tend to stay in Worcester because the city has a wide range of housing options that can scale with your finances.

People who like suburban living can still purchase vacant land on the fringes of the city to build a new property. A two-acre lot with few building code restrictions can be purchased for about $70,000 in the outer portions of the city. You can also get nearly an acre of vacant lakefront property for about $330,000.

On the other hand, people who desire urban living can live in the city's traditional upper-class urban neighborhoods. There are many upscale homes available on Salisbury St. and in the neighborhood of Tatnuck. People desiring upscale properties could also consider moving into one of the downtown condos that have been constructed in recent years. Many penthouses and full-floor units are available in these buildings at reasonable prices.

Mid-Range Homes

The vast majority of homes in Worcester are designed to support the city's vibrant middle class. The median home price in the city is $315,050 because the city's median income is $46,407. Of course, there are many people in the city who have an income that is dramatically higher or lower than the median, but the significance of this data is that homes are relatively affordable in Worcester.

In some parts of the city, median home prices are much higher than average. For instance, on the west side of the city, homes sell for a median price of $329,950. However, there are also areas where you can find homes that are much cheaper than average.

Affordable Houses

A city that supports over 35,000 students and a diverse range of professionals needs to have affordable housing options for its residents. Thankfully, Worcester has no shortage of homes available for people who are just getting started in life. The city has over 2,000 student, studio, one-bedroom, and two-bedroom condominium units under construction in its downtown areas. In total, it completes over 800 of these properties each year to support thriving growth in the community. At the higher end of the affordable segment, new two-bedroom condos can be purchased for around $140,000.

The city also has older residential areas where relatively inexpensive homes can be found. As with all cities, some of these properties require some repairs before being ready to support new residents, but they are available for people who want to put in some work to make a home of their own. Some of these properties can also be ideal for the rental markets. For this reason, there are plenty of options available for renters and property investors alike.

Residential Real Estate Market Outlook

Digitalization will increasingly drive people out of major U.S. cities to smaller edge cities and suburban communities. Future home buyers will simply see no reason to pay several times more for a home that is close to downtown areas when they can buy the same property at lower cost in a less congested area.

The city of Worcester is ideally situated to capitalize on trends in the property markets. Massachusetts residents are fleeing Boston in favor of moving to less congested communities. Worcester offers the full range of residential options that home buyers require, including urban living options, historic housing, and suburban developments. If residents need to go to Boston for in-person meetings or other activities, they can still reach the center of Boston by car in just 49 minutes.

The area surrounding Worcester is also ideal for growth. The region west of Interstate 495 has traditionally been considered an exurban area that supports both agricultural needs and suburban living. Worcester is unique because it is one of the largest edge cities in the greater Boston area. Therefore, residents can get the best of both urban living, suburban living, and even exurban living. People can also build homes just outside of the technical city limits of Worcester to enjoy the benefits that the city provides by taking a very short commute.

The bottom line is that Worcester is poised for rapid growth in the near future. People who buy homes in the city can, therefore, enjoy an above-average chance of being able to sell their properties for more than they initially paid. As a result, it is possible that some homeowners could enjoy a significant return on investment from purchasing a property in the area.

Multi-Family Properties

Multi-family properties have become more popular in recent years as some younger people have switched preferences to favor being closer to attractions and other people. The reasons why people purchase multi-family developments today are different than why people chose multi-family properties in the past. Transportation is no longer a major reason why people choose multi-family living since most residents of multi-family developments own a car. Instead, they prefer to live within walking distance of bars, restaurants, and other shopping attractions. Many professionals who work online also feel fairly isolated, so they like the idea of living close to other people.

The city of Worcester has long had a lively downtown community full of bars, restaurants, and high-tech startups. City planners have recently focused on developing these areas to provide residents with plenty of multi-family options. Multi-family properties are springing up along Main St. and Highland St. near Saint Vincent Hospital and MCPHS University. Some multi-family properties have also been built outside the central downtown areas near the entrances to highways and other major attractions.

The best part about multi-family properties in the city is that they are relatively inexpensive. Many property developers offer units that can be rented at affordable rates of less than $1,000 per month. Other units of various sizes can be purchased for around $60,000 to $150,000. Buildings usually are designed to cater to certain demographics, such as students under the age of 27 or retired people over the age of 65. Therefore, you can live around people who are just like you to make forming friendships and business partnerships easier.

The vast majority of multi-family options available in the city are priced in the middle of the market. Most multi-family properties are relatively dated since many of the large mansions that were built in the early 1900s have since been divided into a series of condominiums. However, most of these condos have been remodeled with the latest appliances, technologies, and furniture.

Additionally, the geographic location of Worcester has enabled developers of multi-family properties to offer units that are relatively large at an affordable price. For instance, high-quality condos that are 2,084 square feet in size are listed on the market for just $289,900. In contrast, a unit of similar size would cost an average of $1.6 million in downtown Boston.

Therefore, residents who desire to live in multi-family properties can get much more value by purchasing in Worcester. Most of the multi-family properties in the city are situated in prime areas with plenty of restaurants and a vibrant nightlife. These properties are also usually situated near major offices and educational institutions, so you can find a property that matches your lifestyle. As a result, the dream of having everything you need within a couple of blocks from home is a feasible possibility when you live in this city.

Commercial Real Estate

The full range of commercial real estate opportunities are available in Worcester. The city has a vast range of offices, industrial centers, meeting halls, retail establishments, and warehouses that can be rented or purchased by local businesses. Since the city has a vibrant history, it offers plenty of options for local business owners looking to start gas stations, auto repair centers, small shops, law firms, and other businesses that have long been of value to the community. However, there are also options available for modern businesses that specialize in logistics, research, technology, and even manufacturing.

Worcester is a great place to start a business because retail space is relatively inexpensive. New startups can rent office space for less than $600 per month in relatively prime locations. Likewise, growing businesses can buy buildings with over 5,000 square feet of office space for less than $1 million.

When buying or leasing commercial real estate in Worcester, it is important to understand that the city has six "opportunity zones" under the Tax Cuts and Jobs Act of 2017. Opportunity zones have three main benefits:

Tax deferrals: Taxes on profits from assets that are reinvested into opportunity zones can be deferred until December 31, 2026.

Permanent income tax exclusion: No capital gains taxes have to be paid on investments in opportunity zones that have been held for at least 10 years.

Basis step-up: When long-term investments are held for a significant period of time, the possibility of their owner passing away increases. Therefore, TCJA enables up to 15 percent of capital gains taxes to be excluded from taxation when the owner of an asset in an opportunity zone dies.

When buying commercial real estate in Worcester, try to find investments that can be situated in an opportunity zone. Lower taxes will increase the net profitability of your venture and reduce tax risk associated with your investments. Since much of downtown Worcester matches the requirements for opportunity zones under TCJA, most downtown properties qualify for tax benefits. These benefits have enormous significance for the city as a whole and for investors looking to profit from starting a new business or investing in commercial properties.

Another major advantage of doing business in Worcester is that the city has a Business Assistance Division that helps businesses to get started. There are many laws at the federal, state, and local levels that new businesses have to comply with, and the BED can help businesses to navigate through these issues. The city will actually partner with new businesses to get them rapid permits, approvals, licenses, and other resources necessary to get started. The BED can even assist property owners and investors with building remediation, document preparation, and public financing.

The city has several organizations aiming to help businesses that are getting started in the area. Many of these organizations are specific to certain industries, so they can help you to find specialized talent and get to know similar businesses in the area. Some of the business organizations available in the city include:

Worcester Business Development Corporation: The WBDC has helped property investors launch and manage industrial parks, cultural centers, vacant land, and other complex projects. If you are looking to own or build significant commercial real estate in the area, the WBDC is a key partner that can help you to succeed.

Associated Industries of Massachusetts: AIM is an organization that works across Massachusetts to advise businesses and government leaders with reliable information. The organization helps businesses to take advantage of the available ecosystem while providing incentives for businesses to take socially responsible actions.

Massachusetts Biomedical Initiatives: Biotechnology is one of the major industries in Massachusetts, and MBI acts as an industry group to help local companies in this industry to prosper. The organization aims to accelerate the success of biotechnology startups and pharmaceutical businesses by facilitating collaboration between businesses, governments, and academia. MBI also offers a lab that can be used by selected businesses to experiment with novel technologies.

Office Space

Worcester has a central downtown area offering several office buildings that provide a significant amount of space for large enterprises. Many of these offices are used for law firms, large corporations, and mid-stage startups. For instance, on Main St., there are numerous high-rise buildings that can be rented or purchased. At the time of writing, a 3,384 square foot office complex is for sale for $369,000 in this downtown area. At a cost of just over $100 per square foot, the downtown office space available in the city is a rare deal that is hard to find elsewhere. Businesses of all sizes can use this space as a springboard to further growth without being burdened with high monthly payments.

The city's history also makes it possible for more traditional offices to be purchased. Many companies in the area use homes that were redesigned for commercial use. Of course, zoning laws do apply, so you have to find a home that can be used as an office or petition the city to repurpose an existing residential building for commercial use. As long as you have a legitimate reason for converting a home into an office, the city will usually be willing to consider your request. However, you should first look for homes that have already been converted into commercial space since these will enable you to get started with your operations immediately.

A wide abundance of corporate office parks dots the landscape in the areas outside of downtown. Major corporations have started regional offices in the city, and these businesses support plenty of jobs for residents in the area. However, businesses always come and go, so some of this office space is vacant. If you conduct a thorough search, you are sure to find inexpensive office space in corporate parks throughout the area that could be the perfect match for your new business. Some of the office space in these corporate parks is available at a very low cost per square foot, so the city provides the perfect real estate for office businesses of all types and sizes.

Worcester also has office space to support smaller businesses that need a minimal physical presence. The city has hundreds of coworking spaces that can be rented and used at negligible cost. Some of these spaces offer virtual office services, so you can avoid having to enter into an expensive lease when your business only delivers services online. You can also rent small day offices for less than $600 per month at many of these locations. There are also business incubators available that can help entrepreneurs who are launching early-stage ventures to attract funding and transform their visions into reality.

Retail Space

Retail space is widely available in Worcester because of the city's history and recent developments. In the downtown area, most of the major buildings have small lots of retail space that can be purchased or rented. Additionally, the city has a wide range of malls that can provide the perfect place to start a new retail business. Greendale Mall, Lincoln Plaza, and Southwest Commons are only a sample of the exceptional malls that offer prime retail space in the area.

There are also plenty of opportunities for small businesses to prosper in the city. In the downtown area, a shop with 1,274 square feet of space can be rented for just $964 per month. Likewise, there are prime locations with a high volume of foot traffic that can be rented at a much higher rate, but these facilities could provide more opportunities if you wish to market products to a high-end segment of customers. Malls targeting all income demographics and tastes are available in the city. Therefore, you are sure to find the perfect place to start a new retail business if you conduct sufficient research.

There are also plenty of franchise opportunities in the city. Entrepreneurs have introduced a wide range of local chains, but national chains are also widespread in the area. Some national chains have yet to open new establishments in the city since it is still developing, so there could be enormous opportunities for entrepreneurs who move quickly to seize the opportunities that the city offers.

Since the city is a developing community, there are still plenty of sites where businesses could construct a new retail facility. Many lots that have been zoned for prime retail space remain wooded and completely undeveloped. Many of these lots can be purchased at a reasonable price. Consequently, there are many opportunities available for retail entrepreneurs in the city. You could build a new retail center for your own business or consider renting it out to local businesses. No matter what strategy you choose, the city truly has something to offer for any retail business looking to get started.

Overall, the retail markets in Worcester are also highly sustainable. Since 2010, the population of the city has grown at an average rate of 3.3 percent per year. With recent trends in digitization, even more robust growth is projected in the years ahead. As a result, retail businesses in the city can expect to continue receiving plenty of foot traffic. Additionally, a strong talent base will remain in the area, so businesses will have no problem recruiting competent staff to help with technology, logistics, sales, marketing, and other crucial functions of every retail business. Businesses can even recruit talent from Worcester Polytechnic Institute, Clark University, Worcester State University, and many other local universities.

Gas Stations

Gas stations are in high demand in Worcester because of the city's unique geographical location. The city is situated on the crossroads between Springfield, Mass., and Boston. Many travelers going to Providence, R.I., and Hartford, Conn., also pass through Worcester. Interstate 90 and Interstate 395 both pass through the city. Consequently, the city is a major stop for travelers along the highway, and this activity generates a substantial amount of revenue for the local government and businesses in the area.

The abundance of demand for gas stations in Worcester also creates significant opportunities for entrepreneurs. In recent years, hundreds of gas stations have opened successfully in the city. Additionally, there are an abundance of vacant lots on the market that are ideal for new gas station businesses. Some of these lots come with the equipment necessary for starting a gas station, such as paved parking lots, gas pumps, and underground storage containers. For this reason, you can get gas station businesses started quickly in the city to start earning revenue in a matter of months.

As with all retail businesses, location is the key to success when starting a gas station. You will first need to find a lot that is suitable for a gas station. Look for vacant lots at major intersections near one of the interstates. Also, be sure to consider the level of competition on the intersection. If there are already three other gas stations at the intersection you are considering, you may want to look elsewhere. Nevertheless, if you pick the right location, you could make a substantial amount of money from your facility as the city continues to develop in future years.

Choosing the Right Real Estate

If you are looking to invest in property, it is crucial to conduct sufficient research before making a decision. Properties can be purchased in a matter of days, but it can take years to recover from a bad investment. On the other hand, when the right properties are chosen, you can achieve your aspirational goals while enjoying a high return on investment.

You should start by doing research online to fully understand the range of properties that are available in the area. Look through available listings to get an understanding of the types of properties that are available. Keep an open mind since some properties can seem better than they appear online when you see them in person. Also, consider booking a stay at a hotel in Worcester to get a feel for the area and an understanding of the different sections of the city.

Additionally, your odds of finding a great property are much higher when you work with an expert in the local market. Consider using a buyer's agent to get the right property at an optimal price. In many cases, hiring a buyer's agent costs you nothing since most realtors will split their commission with your agent. There is plenty of information about properties available online today, but a knowledgeable buyer's agent can provide you with a depth of understanding that online research cannot offer on its own. Best of all, the knowledge that a buyer's agent has is private, so you get an advantage over buyers who only know public information that is available to everyone online.

The bottom line is the city is one of the best places to live in the U.S., and the city truly has something for everyone. It can be a great place to raise a family, but it also has nightlife options for young adults. The city's economy is growing to provide jobs in nearly every field. Additionally, local residents get access to an excellent employment market while only having to pay a fraction of the cost per square foot for housing. Businesses can also take advantage of these trends to reduce their cost structure. Therefore, the city, is a place that you can call home for life while.