Banker & Tradesman has analyzed home price data from the first six months of 2023 to identify the state’s hottest single-family housing markets. iStock illustration

A residential price boom in Central Massachusetts appears to have taken a firm hold in Leominster and Fitchburg, as the two previously hardscrabble, post-industrial cities along Route 2 become more attractive to westward-bound homebuyers escaping higher real estate prices in the Greater Boston area. 

The Central Massachusetts housing market has been on a roll for a few years now, due largely to the post-COVID rise of remote working and the relative affordability of towns and cities largely in or near Worcester County. 

In fact, Banker & Tradesman last year highlighted how Central Massachusetts communities were among the hottest local residential real estate markets across the state during the first half of 2022. 

This year, the region continued to do well during the recently completed spring housing market. Among the top 25 hottest towns from January 1 through June 30 were Holden (with median single-family prices up by 20.6 percent to $525,000), Grafton (up 13.64 percent to $625,000) and Spencer (up 11.89 percent to $400,000) according to data from The Warren Group, publisher of Banker & Tradesman. All three communities are located in Worcester County. 

In fact, Holden, located just northwest of Worcester, ranked No. 2 on this spring’s hot list, just behind the Pioneer Valley’s Northampton, where single-family home prices rose by 26.19 percent to $530,000 during the first half of the year. 

Other towns on the list range from Cape Cod’s Dennis and Hyannis to the North Shore’s Marblehead and Beverly to Hampden County’s East Longmeadow. 

Two Surprises Make List 

But there were also two big Central Massachusetts surprises on this year’s list: Twin cities Leominster (where median single-family home prices rose by 11.84 percent to $425,000) and Fitchburg (up 10.31 percent to $345,000). The two cities ranked Nos. 10 and 15, respectively, in Banker & Tradesman’s analysis of spring home price data from The Warren Group. 

By comparison, median single-family home prices rose only 1 percent statewide in June, according to the latest Warren Group data. 

For decades, both Leominster and Fitchburg were known for their rough-around-the-edges ways, with high unemployment and large swaths of downtown buildings sitting vacant. 

In recent years, however, Leominster, population of 43,782, and Fitchburg, population 41,946, have seen a number of redevelopment projects, including renovations of older, empty buildings and construction of entirely new multifamily rentals with ground-floor retail spaces. 

The two communities have also seen the opening of a slew of new restaurants and shops in their downtowns. 

“They both have healthy downtowns now,” said Matthew Straight, a broker at Straight Real Estate Solutions at Coldwell Banker Realty in Leominster. “Generally, when you have healthy downtowns, you have healthy real estate markets.” 

It also helps that Leominster and Fitchburg both have commuter rail service and are conveniently located along Route 2, in a region known as North Central Massachusetts, Straight said. 

The net result: This past spring, homes for sale in the two cities lasted only 19 days on the market – and the majority of homes had offers within six days of being on the market.  

“Homes are moving fast,” Straight noted. 

One-third or more of the homebuyers in North-Central Massachusetts this spring were newcomers to the area, one prominent local broker estimates. iStock illustration

Remote Work Refugees 

Of course, the cities’ relatively low real estate prices and the rise of remote work have also helped home prices in both places, as well as in other cities and towns in Central and Western Massachusetts, industry figures said. 

“It’s the affordability and also the urban vibe,” said Kathy McSweeney, a broker associate at Lamacchia Realty-Northborough and the past president of the Realtors Association of Central Massachusetts. “People keep moving west and they’re noticing Fitchburg and Leominster. There’s so much more to do [in the two cities]. There’re also more job opportunities.” 

That westward migration is being driven by the lack of homes for sale across the state, said Kurt Thompson, the broker/owner of RE/MAX Liberty in Westminster. Many buyers in the area rea in search of deals they can’t obtain in eastern Massachusetts, he said.  

Thompson estimated that 30 to 40 percent of the potential buyers he’s dealing with today are newcomers to the Central Massachusetts market.  

“We’re seeing a lot of people coming from out-of-market areas to buy here,” he said. 

In urban core communities like Boston, Arlington and Dedham, the median price of a single-family home is now hovering just over $1 million, and the median condominium sale price hit $775,000 in July, according to data from the Greater Boston Association of Realtors. But people can buy a spacious single-family home in the North Central Massachusetts region for about $450,000, Thompson said. 

“Nothing inside Route 128 is going to come close to most of the prices in [North Central Massachusetts],” Thompson said. 

 Geography a Key Advantage 

Other North Central Massachusetts towns are doing well, including Athol, Orange and Westminster, say Thompson. Even communities just east of Interstate 495, such as Marlborough and Hudson, are seeing big spikes in prices, Thompson noted. 

“They’re all seeing significant increases in values,” he said. 

Nicholas Pelletier, a team leader at Keller Williams North Central, said Leominster and Fitchburg are geographically well-located for those searching for what he called “financially obtainable housing.” 

“Traveling west on Route 2, Leominster and Fitchburg are among the first places of opportunity that you see,” he said. “They’re often the best opportunities for those who can’t afford prices elsewhere.” 

He added that developers have also discovered both cities.  

Most recently, Fitchburg can boast of the BF Brown Redevelopment project, which includes the renovation of an old school into about 50 “artist preference” apartments, located across the street from the Fitchburg Art Museum. 

In Leominster, construction is underway on a number of housing projects, including the Brooks Pond apartment development off of Central Street, said Pelletier. 

“There’s a lot happening in both cities,” he says.