The median price for single-family homes sold in Worcester County during the first eight months of 2003 surged 20 percent. This three-bedroom home at 202 South Ashburnham Road in Westminster recently sold for $245,000.

Home prices in three out of every four towns and cities in Worcester County have experienced double-digit price appreciation this year, as many homebuyers searching for more affordable housing options headed farther west of Boston.

The median price for single-family homes sold in Worcester County during the first eight months of 2003 was $228,000 – a 20 percent increase from the $190,000 median price recorded during the same period last year, according to The Warren Group, parent company of Banker & Tradesman.

Price gains in the county may not continue at such a rapid pace, however. Local Realtors point out that interest rates, which hit decades-spanning lows in August and strengthened the buying power of many home seekers, have since begun to rise.

Forty-six out of 60 communities in Worcester County – including major cities like Leominster, Fitchburg and Worcester – have seen single-family median home prices increase by double-digits. Single-family median selling prices in smaller towns like Dudley, Clinton, Leicester, Millbury and Westminster surged more than 25 percent during the same period. In Clinton, where 63 single-family homes were sold through August of this year, the median price ballooned 46.6 percent to $220,000 from $150,000 a year earlier.

Countywide, 5,175 single-family homes were sold through August of this year, up 1.8 percent from the 5,081 homes sold during the same period in 2002.

According to local Realtors, a big factor in the price surge was low mortgage interest rates, which pushed more buyers into the market and allowed them to qualify to purchase higher-priced homes. Another factor pushing prices up in some Worcester County communities – where developable land is more plentiful than in eastern Massachusetts – has been the construction of large new homes.

John Hogan, broker-owner of Hogan Real Estate in Clinton, a Central Massachusetts town 13 miles north of Worcester with about 13,500 residents, said buyers from MetroWest Boston communities like Wayland used to come to Clinton searching for a four-bedroom Colonial in the $250,000 price range.

“Now, we’re sending people west of us to towns like Gardner and Templeton,” for the same kind of house at that price, said Hogan.

In Gardner, the median selling price for a single-family home sold through August was $162,033 – 26 percent lower than Clinton’s median of $220,000. In Templeton, the median selling price for a single-family home during the same timeframe was even lower – $155,000. However Templeton’s median price through August of this year is still 19 percent higher it was as the same point a year ago, when the median price was $130,000.

The sale of newly constructed single-family homes has boosted prices in Clinton and some surrounding towns, according to Hogan. Hogan estimates that 25 new homes have been constructed in Clinton within the past year and those homes were generally offered for sale for more than $300,000.

‘Better Solutions’

Cheryl Eidinger, a Sutton resident who is a vice president for ERA Key Realty Services, said some Worcester County towns have been aided by improved highway access.

About a year ago, a new Massachusetts Turnpike interchange to Route 146 was built making it easier for homeowners in towns in southern Worcester County like Northbridge, Millbury, Uxbridge and even Ashburnham to commute east to jobs, according to Eidinger.

The better highway access gave buyers searching for cheaper housing alternatives who work in Worcester, Framingham and the Boston area more choices. “These communities became better solutions for housing affordability,” she said.

Eidinger also believes that communities like Northbridge, where the median price for a single-family home jumped 23 percent to $270,000 during the first eight months of 2003 from $219,900 during the same months in 2002, became more desirable as employment opportunities, particularly in the biotech industry, in the Worcester area improved.

And while the majority of home sales in places like Northbridge have been of existing single-family homes, newly constructed homes were also a significant part of the market.

“We still have quite a bit of land that’s available to be developed and it has been,” said Eidinger. “New construction has become a large part of our sales base.”

In Westminster, a suburb in north central Massachusetts 6 miles west of Fitchburg and 24 miles north of Worcester, there has also been a spurt of new construction. The median price for a single-family home climbed 31 percent between January and August to $236,500 from $180,000 during those same months last year, according to The Warren Group. Unit sales also increased 10 percent, with 65 single-family homes sold through August of 2003, compared to 59 during the same months last year.

Diane Dimacale, owner of Diane Dimacale Real Estate in Ashburnham, estimates it costs about $100,000 for a building lot in Westminster. As of last week, there were eight pieces of land available for sale in Westminster, ranging from a five-acre lot for $85,000 to nine acres on sale for $300,000.

Of the 37 homes on sale in Westminster, the lowest price for a newly built home was $387,500 and the highest was $530,000, she said. Waterfront properties tend to be the most desirable and often sell quickly, Dimacale.

Dimacale said much of the residential real estate market started slowing in August, and homes are staying on the market longer. Dimacale and the agents in her office attributed the slowdown to the fluctuating interest rates in late summer and to job layoffs in the region.

But Dimacale said some sellers are refusing to take anything less than asking price and are leaving their homes on the market for months. Of the 20 pending sales in Westminster as of last week, for example, the one with the highest price – a $499,000 single-family home – had been on the market for 120 days, or four months. A $440,000 home was on the market for 140 days before it attracted a buyer and a newly built home, priced at $422,500, took 288 days to go under agreement.

Local Realtors are predicting that the rate of price appreciation in Worcester County will not be as high in upcoming months because the number of for-sale homes has started to grow and interest rates will likely climb.

“I don’t expect appreciation to run at the level it’s run this year,” said Eidinger.

Hogan agreed, but said that come spring, sales activity will pick up again as long as rates stay low.

Meanwhile, not every community in Worcester County saw home prices rise. Median prices dropped in two towns in Worcester County, Bolton and Royalston, during the first eight months of 2003 compared to the same months a year earlier. The median selling price in Bolton fell 7.5 percent to $402,500 from $435,000, and in Roylaston the price slipped 0.86 percent to $120,950 from $122,000.