All Forum Posts by: Brian J Allen

@Daniel Consalvo, I attended the ADU meeting last night with the city. That will help slightly, but not much. The biggest issue for Worcester is the commercial tax rat at over $30/$1000 which discourages businesses from the city. You will see that most of the non residential construction is in Shrewsbury and Millbury simply due to taxes. The city is also encouraging people to apply for variances on smaller than 5000 SF lots which might help. What I am seeing as an agent it many of my clients are selling properties I got them and taking the gains.

Here is an article that appeared in the Worcester Chamber Exchange.

I've been hammering away at this issue for years on my BiggerPockets blog.

Let's not belabor the point, but Worcester's commercial tax rate is directly shaping what gets built in the city.

Sure, you can spot all the shiny new residential developments in Worcester, but where are the hotels? Why does a city of 200,000 souls have a paltry 1132 hotel rooms? Compare that to Providence, with 5500 hotel rooms, 1700 of which are within walking distance of their arena.

This has a direct impact on the City not being eligible to host NCAA and major conference sporting events.

The data in this article is mind-boggling. A hotel property owner could pocket an extra $270k a year by building in one of the surrounding towns instead of Worcester. And don't get me started on grocery stores – building one in Worcester instead of Shrewsbury would cost the property owner an extra $220k annually.

City councilors, can we please get some action here? Let's bring back the lost development, events, and jobs to the heart of the Commonwealth.

Have you seen the latest article from the Worcester Telegram? It's about the skyrocketing rents in Worcester. 

Read the article here.

I've been discussing this issue for years on WorcesterMulti Bigger Pockets Blog.

So, $1919 for a one-bedroom in Worcester? That's way too high. It's changing the whole vibe of the city.

Worcester used to have its own identity, but now it's become a commuter hub for folks working in Marlboro/Hudson, Natick/Framingham, and even Boston, thanks to remote work options.

Let's break it down. Add in utilities at $200 a month, and you're looking at $2119/month. If that's 30% of your income, you'd need to earn $7k a month or $84k a year. But here's the kicker: the median household income in 2021 was only $56,746, and most households below that are renters.

In the article local agents in the multifamily sector talk about why landlords are hiking rents. Taxes, water/sewer, insurance, maintenance – it all adds up.

It's heartbreaking that Worcester is becoming too pricey for its own residents. This has led to a diaspora to places like Webster, Northbridge, and Southbridge.

Sure, there are new units in the pipeline, but they're unlikely to help the typical Worcester renter. It's a tough situation all around.

I wasn't surprised when I stumbled upon an article in my news feed this morning titled "Realtors 'Running out of Money'." It sheds light on two critical issues affecting the industry.

Read article here.

Firstly, there's been a noticeable decrease in transactions. Higher interest rates have made it difficult for buyers to secure loans, while sellers are hesitant to part ways with their fixed-rate mortgages. Consequently, there are fewer commissions available for real estate agents.

Secondly, there's the looming lawsuit against the National Association of Realtors (NAR), which threatens to squeeze the commissions that end up in the hands of buyer's agents. Traditionally, these agents, often younger and less established, educate buyers about market nuances, show properties, and represent them in offers. Their compensation typically comes from the cooperating agent's commission upon a successful purchase.

The NAR lawsuit will essentially remove the automatic buyer agent commission from the MLS. This will make it necessary for Buyer's agents to provide potential buyers with that contract for payment of their services prior to working with them. It may be hard for some less experienced Buyer's agents to show their value to their potential clients.

The numbers are not surprising either.

Real estate agents in 2019        549,000

Real estate agents in 2023        440,000

I think they should probably qualify these numbers, as these really are the ones WORKING AS AGENTS, there are believed to be 2,000,000 licensed real estate agents in the country, and 1,548,058 Realtors (members of the NAR) as of January 2023

Did you know that the most common number of deals an agent does in a year is zero? It's not the part-timers who are quitting but those who sought a full-time career in real estate.

The article suggests that while some agents may struggle to make ends meet, those who excel will endure. It's a matter of survival of the fittest in the industry, with good agents staying and others seeking alternative employment.

@Ashton A. Moore. I own a Row Home in the Medfield section of Baltimore.  I purchased mine and had similar issues, and as @Andrew Freed says these are common.  Depending on location in Baltimore the tenants probably won't even notice those electrical issues.  The one I am most concerned with is the moisture stain, were they able to figure out where that is coming from?  The roofs on these things are small, and many have the skylight in the bathroom which often leaks, I would tighten up the roof, then address the plumbing issues then move onto the electrical.  The key on this is the LOCATION, as you know Baltimore is made up of neighborhoods and they all have their own unique characteristics.  Make sure you are buying where you want to buy, not just because you are getting a deal on a house.

For Worcester normally I do about even in Multifamily on and off market. This year I have done 3 on MLS, 3 off MLS and have 4 more under contract off MLS. That makes me feel that I will be 2 off market deals for every MLS deal in Worcester

These number are interesting as that inventory of Multis is low. Historic average is about 60 buildings for sale at any time, so we are way down. What we are seeing is that there is more off market activity going on. People are only paying appraised price for properties so sellers are simply finding someone off market to pay appraisal price and not have to show the properties at open houses and disturb the tenants. The other interesting statistic worth looking into is the number of residential rentals for sale in Worcester. Typically there are about 20 units listed for rent at any given time on the MLS over the last 5 years or so. Right now there are 103 apartments listed for rent. THAT IS A HUGE NUMBER. This shows that there are buyers for the multis, but at the same time those new owners appear to be picky about the tenants they choose.

@MinhoLee I would be glad to help you find something in Millbury/Grafton/Worcester/Shrewsbury.  I live in Sutton so I drive these towns on a daily basis.  Price wise, Millbury and Worcester will be the lowest entry point as they have smaller houses

@Colleen F. I disagree about the walkability of Worcester to the hospitals.  There are 3 hospitals that make a triangle between Shrewsbury Street and Belmont Street.  Inside that triangle there is a lot of walkability and rentals.  On the West End of Shrewsbury street by Union Station you have Alta on the Row which will come on line in the next 6 months, from here you can walk to Saint Vincent's hospital very easily along with MCPHS.  What people don't realize is that there are a lot of 3 deckers in that Triangle as well.  Yes you have to pay a premium but you can buy them.  There are a lot of owners I know that will sell, but these properties have value so they need 1031 purchase targets before they let them go.  @Aline Elad my recommendation for anyone looking to do this is to find a local realtor who sells in that area. They will be able to find you stuff. Most of the good stuff trades off MLS so you need a realtor who is tied into the local investors

@Steve Tse, I welcome the public discussion about this, and it is good that you understand that Worcester is heterogenous and there are neighborhoods.  The reality here is that certain people want to be in certain neighborhoods due to location and where they grew up.  They like their shops, and their restaurants.  Then there are the people who are moving to Worcester, and they want something different, maybe more like what you are inquiring about above.  I am also interested to see what others say about the city.