Brian Allen can’t remember the last time he saw so many apartments available in Worcester.
On a shared database that brokers use to list properties, the real estate agent sees three times more rental units than usual. Landlords regularly ask if he knows anyone looking for a unit, and he sees numerous apartment buildings offering special deals to lure prospective tenants.
It all reflects at least a temporary cooldown of what’s been a hot housing market in New England’s second largest city. Over 1,100 mostly luxury apartments have been built in recent years — to the point Allen and other local housing experts say there are currently more units than people who can afford them, and rents are plateauing.
“There’s a leverage play for certain tenants that did not exist prior,” he said. “It’s only certain tenants. The average person who’s making $80,000 and needs a three-bedroom apartment has no leverage.”
The housing development boom started years ago as people moved to Worcester in part to take advantage of its historically low cost of living compared to Boston. The increase in demand caused rents to surge, and developers tried to capitalize.
The city’s supply of apartments has since hit a record high, according to the website RealPage. New complexes include The Revington, The Cove, and Alta on the Row — all of which have more than 150 units and charge at least $2,000 a month for a one-bedroom apartment.
The buildings’ managers did not respond to requests for comment. But according to their websites, each currently has more than two dozen units available for rent, and they’re waiving at least one month of rent. Real estate agent Andrea Castinetti says other buildings she works with are doing the same.
“We’ve been doing rentals for pretty much over 10 years,” Castinetti said. “I’ve never seen it like this.”
Housing markets in other cities are cooling, too, due to a combination of increased apartment construction and economic uncertainty. According to Realtor.com, nationwide median monthly rent on units with up to two bedrooms fell 1.7% year-over-year in October. Boston’s average rent is down for the first time since 2021, although still over $3,000 a month.
In Worcester, the increase in supply also appears to be causing rents to stagnate. Following years of increases, average rent is now the same as it was at this time last year: $2,100, according to Zillow.
Allen said he’s not surprised. Most of Worcester’s new luxury units have come online at around the same time. He said there’s a limit to how many new high-end apartments the market can absorb.
“There’s only so many people with a 700 credit score and 100,000 worth of income,” he said. “So what do [landlords] do? They discount.”
Still, the benefits aren’t trickling down throughout the entire market.
Even though there are plenty of luxury units to meet demand, experts like Leah Bradley, CEO of the Central Massachusetts Housing Alliance, say there still aren’t enough affordable apartments around the city.
“We do believe that you need to build housing for all income levels. However, we also need to build more reasonably priced or affordable units,” Bradley said.
Some tenants like Courtney Miller continue to see their rents increase. Miller used to pay less than $1,000 a month for her three-bedroom apartment in a triple decker near Kelley Square. But then her landlord sold the building, and the new owner doubled her rent to help pay for improvements to the property.
Miller said she’s heard her rent will go up another $400 in March to $2,300. She’s considering signing a six-month lease and then moving.
“We don’t need a three-bedroom, when it comes down to it. So we would probably look to downsize to something cheaper,” she said.
Housing experts question how long Worcester’s housing market will remain cool, noting that demand usually dries up a bit around the end of the year. Bradley said people continue to move into the city, so they could ultimately fill up the units.
Still, Andy Howarth with the nonprofit Worcester Community Housing Resources, said the current dynamic combined with high construction costs could serve as a warning for developers.
“As fast as your fortunes can rise, they can fall,” Howarth said. “If I were looking at doing a high-end or a mixed-income project that depended on high rents right now, I think I’d be having second thoughts.”
