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Prominent real estate economists at Realtor.com say the housing markets in and around Worcester and Springfield could see 9.1 percent and 10.5 percent increases in home sales, respectively. iStock illustration
Springfield and Worcester real estate industry figures are flattered that their areas are expected to be among the top performing housing markets in the U.S. in 2024..
The only problem: They’re not quite sure either market can live up to those high expectations.
Earlier this month, Realtor.com’s economics team ranked Springfield and Worcester in the seventh and eighth spots on its list of the top 10 real estate markets across the country in 2024.
The two Massachusetts metros ranked ahead of, among others, the Los Angeles-Long Beach-Anaheim metropolitan area, which came in 10th on the Realtor.com list. Toledo, Ohio ranked No. 1.
So how did Springfield and Worcester land on the list? A combination of recent sales and price growth, economic conditions, affordability and their locations near higher-priced regions, such as Hartford and New Haven, Connecticut. and Greater Boston.
The bottom line: Both areas stand to gain from increasingly unaffordable housing in large swaths of Connecticut and Eastern Massachusetts. They also stand to gain from the rise of remote-working trends.
“The demand for housing in Greater Boston [and Connecticut] is spilling over into other markets,” said Hannah Jones, senior economic research analyst at Realtor.com. “Prices are getting higher in [Springfield and Worcester] but they’re lower compared to elsewhere.”
10.5 Percent More Sales Predicted
Amid ongoing declines in homes for sale across Massachusetts and the nation, Realtor.com is projecting the Springfield-area market will see a 10.5 percent increase in sales of single-family homes, condominiums and co-ops in 2024.
Meanwhile, the site’s economists expect Greater Worcester to see a 9.1 percent boost in sales in 2024.
Both markets are expected to see approximate a 4 percent increase in median home prices.
Realtor.com’s sale and price projections apply to the Springfield and Worcester metropolitan statistical areas, as defined by the U.S. Census Bureau.
As far as prices go, both markets, or at least parts of them, seem to be already beating Realtor.com’s projections.
The year-to-date median single-family home price in Hampden County, home to the city of Springfield, was up 6.79 percent through the end of October, hitting $299,000, compared to the same period in 2022, according to data from The Warren Group, publisher of Banker & Tradesman.
The year-to-date median single-family home price in Worcester County was up 5.37 percent, to $432,000, through October, compared to the same period in 2022.
In terms of prices, both markets outperformed Greater Boston, where the year-to-date median single-family price through October rose by only 2.9 percent, though overall prices were much higher, ending the first 10 months of the year at $720,000.
Worcester’s Mini Renaissance
Based on the price numbers for Springfield and Worcester, exceeding Realtor.com’s projected 4 percent increase in 2024 seem to be almost sure bets.
But the problem – and the challenge – is with the site’s sales predictions.
According to Warren Group data, year-to-date single-family sales in Hampden County were down 17 percent through October, to 2,956, while single-family sales in Worcester County declined by 24.57 percent, to 5,053. Similar trends hold true for condo sales.
Those are big downward numbers to overcome.
Lee Joseph, an agent with Coldwell Banker and 2023 president of the Realtor Association of Central Massachusetts, said she can’t predict how sales in the Worcester area will fare next year.
But she sounded pessimistic about a big turnaround soon.
“Everyone is being impacted by the low inventory” of homes on the market, she said.
Still, the Worcester housing market and economy have been performing well in recent years, as the state’s second largest city undergoes a mini renaissance downtown, with new restaurants, apartment buildings, a new ballpark and shops helping to attract new residents to the city and entire area, Joseph said.
“It’s not the frenzy we saw in years past, but it’s still moving ahead quite well,” she said of the Worcester-area housing market in general.
The Worcester-area housing market may or may not hit Realtor.com’s sale growth projection of 9.1 percent in 2024.
But Reator.com was right to choose Worcester as a potentially high performer next year, said Joseph: “We have all the right components to be on the list.”
Out-of-Town Buyers in Springfield
In Springfield, Heidi Pafumi, an agent and team leader at Slope to Shore William Raveis, said she has doubts her housing market will see a 10 percent spike in sales next year.
“We’ll see some kind of increase, but I think 10 percent is stretching it,” she said.
Some of next year’s sales increase, if it happens, will be attributable to more pandemic-era foreclosed homes coming on the Springfield-area market, she said.
Tanya Vital-Basile, a broker-owner of Executive Real Estate, also said she thinks that sales will increase next year, though couldn’t say by how much.
In general, the region’s overall market is definitely seeing a lot of activity, she said.
Newly constructed suburban homes in the $500,000 range are being snapped up by out-of-state buyers who think they’re getting them for a deal.
“A lot of new buyers are coming from Boston and New York,” said Vital-Basile. “Lots of people who work in Hartford are also buying in Wilbraham, Long Meadow and East Long Meadow.”
She added Boston and New York investors are also scooping up multifamily homes and complexes in Hampden County.
“Multifamilies are now tough to find and get,” she said.
Realtor.com’s Jones said increasing sales next year by 9 to 10 percent isn’t as far-fetched as some may think.
Sale increases would be “kind of coming up from the bottom,” she noted.
Meanwhile, mortgage interest rates seem to have stabilized of late – and some think they may even come down next year, she noted.
“We do expect these more affordable markets to improve next year,” she said.
