Over the past decade, the City of Lowell has embraced residential development as part of a comprehensive downtown redevelopment strategy. By broadening the mix of uses, Lowell has been able to complement the workday population with greater evening and weekend activity Downtown. The City’s embrace of apartments and condominiums was prompted by observations of market and demographic trends and the recognition that Lowell was well-situated to take advantage of these trends.
This success reinforces that Lowell correctly anticipated and continues to effectively respond to social and demographic trends which result in a compelling market demand for urban housing and related development. The three major growth areas among American households currently are young singles, couples, and non-traditional families, empty-nesters and early retirees, and immigrants. All three are groups which have traditionally favored city living. Rising energy costs have only served to bolster the demand for walkable urban neighborhoods well-served by transit, a trend that is likely to continue over the long term.
A recent analysis of residential condominium sales completed by staff from the Division of Planning and Development further bolsters this theory and strategy. While Eastern Massachusetts residential real estate prices have declined since a 2005 peak, Downtown Lowell condominiums continued to appreciate in value through 2007. In fact, in all but one building, values for condominium sales have increased relative to prior sales and continue to do so. Downtown condominium prices, which mirrored the prices elsewhere in the City through 2006, were valued at nearly 50% more than those in other areas of Lowell in 2007.
Because of the strength of the Downtown market, condo sales overall in Lowell have also held their value considerably more strongly than single-family homes.
As the overall real estate market in Lowell appears to be showing signs of improvement with significant increases in sales volumes over the past few months, look to Downtown to continue to perform well. This also bodes well for commercial development as employers, retailers, and others tend to seek locations with strong and stable populations, especially in a service economy. The three dozen new businesses that have opened in Downtown since 2000 are a local example of this. We can also expect to increasingly see the concept of live-work properties expand well beyond the artist community, with urban locations like Downtown Lowell at the forefront.