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02/05/2010
February 5th, 2010 | Stable rent
By Martin Luttrell TELEGRAM & GAZETTE STAFF
High unemployment and the availability of foreclosed properties coming back on the market are helping to keep rents stable in Worcester County, according to rental property managers.
Rental rates in the county showed their strongest gain in apartments with two bedrooms and a single bathroom, with a den or loft, increasing from an average monthly rate of $1,100 in the third quarter of 2007 to $1,225 in the third quarter of 2009, according to a survey by Sunrise Management and Consulting in Albany, N.Y. Other apartment configurations, depending on square footage and community, showed a variance in rental rates in the survey.
Sunrise's report shows that rents in the larger markets in Massachusetts were flat, with regional increases being offset by declines in more populated areas.
"New household creation is the driver in multifamily market growth," said Jesse Holland, president of Sunrise. "With unemployment up, housing starts down and more stringent lending requirements, there is not enough new-household formation necessary to push growth in rental occupancies and rates," he said, referring to data reflecting conditions in New York and New England
Average monthly rental rates grew from $970 in the third quarter of 2007 to $990 in the third quarter of 2009 in the region comprising the counties of Worcester, Berkshire, Franklin, Hampden and Hampshire, according to Sunrise data.
In Worcester, rates have dropped in recent quarters, partly because of properties that were auctioned at foreclosure being renovated and used as rental properties, said Edward Murphy, chief executive of weRENTcentralmass.com, which manages properties in Worcester and acts as a broker for property owners in Worcester and Central Massachusetts.
"We've had high-end condo conversions come on line, like the University Park Lofts," which started as a condominium project with only a few units sold, and the remainder rented out.
"I would attribute that to the foreclosures coming through the pipeline. A few years ago it looked like inventory would be low. It didn't take into account foreclosed properties. Now, we have renovated units coming on (as rental units)."
Mr. Murphy said there is a low supply of high-end one- and two-bedroom apartments in the city and surrounding communities.
"When we get apartments like that, they go quick. There's a lot of people who work at places like UMass and Babcock Power that would take them. The only other option is a big complex, like Plantation Ridge."
Central Massachusetts rental rates, while stagnant, are more stable than in other areas of the country that were overbuilt during the housing boom in the first half of the last decade, said Sunrise official Richard Dolins.
"What we have is not a bad backslide, but it's crawling along," he said. "I would think that in these economic times, that's a good thing. Owners are keeping their occupancy rates up.
"The Northeast market was not as overbuilt as some, like Denver and Las Vegas. There are tens of thousands of apartment units more than those communities could absorb. We have not seen that in Western Mass."
Mr. Dolins thinks there is little excess of multifamily housing in Worcester County, and that the competition may be keeping rates stable. He said the market should see more of the same for the next two quarters.
"I know economists have their definition of recovery, but I don't see how recovery exists with 10 percent unemployment," he said.
"Over the next six months, looking out, I think we're going to see the same things. I don't know how the federal government is going to shake out the housing market."
Read more: http://www.telegram.com/apps/pbcs.dll/article?AID=/20100205/NEWS/2050422/1002&CSAuthReq=1#ixzz1BPYZxrIm
Joe Ward of weRENTcentralmass.com on Grove Street in Worcester meets with Jemimah Faith Ndungi regarding her rental application. (ED COLLIER)
By Martin Luttrell TELEGRAM & GAZETTE STAFF
High unemployment and the availability of foreclosed properties coming back on the market are helping to keep rents stable in Worcester County, according to rental property managers.
Rental rates in the county showed their strongest gain in apartments with two bedrooms and a single bathroom, with a den or loft, increasing from an average monthly rate of $1,100 in the third quarter of 2007 to $1,225 in the third quarter of 2009, according to a survey by Sunrise Management and Consulting in Albany, N.Y. Other apartment configurations, depending on square footage and community, showed a variance in rental rates in the survey.
Sunrise's report shows that rents in the larger markets in Massachusetts were flat, with regional increases being offset by declines in more populated areas.
"New household creation is the driver in multifamily market growth," said Jesse Holland, president of Sunrise. "With unemployment up, housing starts down and more stringent lending requirements, there is not enough new-household formation necessary to push growth in rental occupancies and rates," he said, referring to data reflecting conditions in New York and New England
Average monthly rental rates grew from $970 in the third quarter of 2007 to $990 in the third quarter of 2009 in the region comprising the counties of Worcester, Berkshire, Franklin, Hampden and Hampshire, according to Sunrise data.
In Worcester, rates have dropped in recent quarters, partly because of properties that were auctioned at foreclosure being renovated and used as rental properties, said Edward Murphy, chief executive of weRENTcentralmass.com, which manages properties in Worcester and acts as a broker for property owners in Worcester and Central Massachusetts.
"We've had high-end condo conversions come on line, like the University Park Lofts," which started as a condominium project with only a few units sold, and the remainder rented out.
"I would attribute that to the foreclosures coming through the pipeline. A few years ago it looked like inventory would be low. It didn't take into account foreclosed properties. Now, we have renovated units coming on (as rental units)."
Mr. Murphy said there is a low supply of high-end one- and two-bedroom apartments in the city and surrounding communities.
"When we get apartments like that, they go quick. There's a lot of people who work at places like UMass and Babcock Power that would take them. The only other option is a big complex, like Plantation Ridge."
Central Massachusetts rental rates, while stagnant, are more stable than in other areas of the country that were overbuilt during the housing boom in the first half of the last decade, said Sunrise official Richard Dolins.
"What we have is not a bad backslide, but it's crawling along," he said. "I would think that in these economic times, that's a good thing. Owners are keeping their occupancy rates up.
"The Northeast market was not as overbuilt as some, like Denver and Las Vegas. There are tens of thousands of apartment units more than those communities could absorb. We have not seen that in Western Mass."
Mr. Dolins thinks there is little excess of multifamily housing in Worcester County, and that the competition may be keeping rates stable. He said the market should see more of the same for the next two quarters.
"I know economists have their definition of recovery, but I don't see how recovery exists with 10 percent unemployment," he said.
"Over the next six months, looking out, I think we're going to see the same things. I don't know how the federal government is going to shake out the housing market."
Read more: http://www.telegram.com/apps/pbcs.dll/article?AID=/20100205/NEWS/2050422/1002&CSAuthReq=1#ixzz1BPYZxrIm
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