Westwood, Massachusetts Faces Single-Family Rental Shortage as Relocating Families Drive Demand

Westwood, Massachusetts, has had roughly 15 to 25 homes for sale at any given time for nearly a decade, according to Tammy DeWolfe, founder of The DeWolfe Group. The town’s rental market is just as tight but gets less attention. DeWolfe says that shortage is an overlooked investment opportunity.

Westwood and nearby towns have very few single-family homes for rent. Meanwhile, demand from relocating professionals and out-of-state families keeps growing. The shortage hurts one group in particular: families moving to the area for jobs. Many want to settle into a school district before buying. That matters in a market where entry-level homes start above $1.1 million.

“There is such a low inventory of single-family homes being rented out,” DeWolfe says. “It’s a good opportunity for a lot of families to move into the area and not have to make a decision to purchase right away.”

Relocations Outpace Rental Supply

Much of the demand in and around Westwood comes from professionals moving to Massachusetts for work. Many come from parts of the country where housing costs much less.

“Some of them have sticker shock because it’s a little pricier than other parts of the country,” DeWolfe says.

For these households, buying a home above $1.1 million right away is a big financial and emotional leap. Many of these families want to learn the neighborhoods and compare schools before buying. Renting a single-family home gives them time to do that. The problem, DeWolfe says, is that almost none are available.

Westwood Versus Norwood Rentals

DeWolfe sees a sharp contrast between Westwood and neighboring Norwood. The difference affects where investors may find the best near-term opportunities.

Norwood has a more established rental market. The town borders two major highways and has several commuter rail stations. Its denser population and easier commute support more apartments and rentals. DeWolfe says Norwood rents range from about $2,500 to $4,400 per month, with higher-quality properties at the top of that range. “There is a constant requirement of rental properties in that town,” she says.

Westwood’s rental market is a different story. The town has very few condominiums and almost no buildings designed as rentals. DeWolfe says single-family homes for rent are rare, and they get rented quickly when they appear. “We don’t have a lot of inventory as far as rentals,” she says.

Westwood’s few condominiums sit mostly near the commuter rail station. DeWolfe says renters find those units especially appealing. But supply is limited. Relocating families want a single-family home in a good school district with easy access to the train. The rental market rarely offers that.

Investment Properties Are Scarce

The same tight supply makes it hard for investors to buy homes at prices that make sense for renting or flipping. DeWolfe says homes under $1 million are rare in Westwood and sell quickly. Those are exactly the homes contractors and investors want.

“To get a house that’s under a million dollars, that’s what most contractors are looking for,” she says. “But they’re hard to find and they don’t come on the market very often.”

DeWolfe says some investors focus on neighborhoods where builders are already replacing small ranch-style homes with larger ones. In those areas, investors have a clearer sense of what a finished home will sell for. In these neighborhoods, DeWolfe says, a home bought for $1.2 million to $1.3 million can be torn down and replaced with a new home worth about $3 million. Investors must act fast. With roughly 20 homes listed at any given time, competition for lower-priced homes is intense.

The outlook is different for investors who plan to rent rather than flip. DeWolfe argues that renter demand in Westwood is unusually steady. Families moving for jobs in the Boston area need a place to live right away, she says. They want housing in specific school districts and will pay for quality.

Why Values Stay Stable

DeWolfe says several features keep Westwood’s market stable, even as home prices soften in other parts of the country. The town sits on a major highway, has commuter rail and bus service, and has schools that draw families from outside the region. Private schools are also a short drive away. DeWolfe says that adds to the town’s appeal for relocating families.

DeWolfe says towns with public transportation tend to hold their value better than towns without it. “When we see a dip in the marketplace, those towns dip a little more than the towns that have commuter rails,” she says.

Westwood has little new construction, and most new homes are priced at $3 million or more. As a result, new homes do little to ease the shortage in the price ranges most buyers want. Homes priced between $1.1 million and $1.5 million sell fastest, according to DeWolfe. They typically sell for about 3% above asking price.

For investors, DeWolfe describes a town with steady demand from relocating families and very few rentals. Because good buying opportunities are rare, the main challenge is moving quickly when one appears.