Is Baltimore going to be a sizzling real estate market for investors over the next twelve months? According to NeighborhoodScout's data, Baltimore's appreciation rate has been at 8.29 percent. Baltimore's appreciation rate in the most recent quarter was 2.61 percent, which equates to a 10.85 percent (annual rate). In comparison to the rest of Maryland, Baltimore's most recent annual appreciation rate is higher than that of half of the state's other cities and towns.
You can either choose to invest in your future or market your home to potential buyers. If you are looking for an affordable real estate market with a high potential for return on investment, you should consider Baltimore, MD. New employers and investments continue to add to the long list of reasons why people desire to live in Maryland. In this article, our focus will be on the current state of the Baltimore real estate market and how it can affect investors and home buyers.
Maryland Housing Market Trends 2021 (Describes October)
Here are the latest Maryland housing market trends, according to the latest report from Maryland Realtors. Statewide, October sales hit 8665, down 10.4% from the same month a year ago. It shrunk the monthly supply of inventory to 1.1, which means it will take just a month for the current inventory of homes on the market to sell given the current sales pace.
Maryland is expected to be a tight housing market for a while, favoring home sellers. Housing inventory remains very low compared to the demand from homebuyers. As a result, the median sales price has reached $369,700, which is 7.2% higher than last October. Homes are spending a median time of 9 days on the market, up from 8 last year. The median represents the middle, with half of the homes spending more time and half spending less.
Among Maryland's 24 jurisdictions, Montgomery County reported the most sales in October, as 1,282 units were sold. Somerset County had the fewest, with 32 closed sales but it grew highest (+52.4%) from last year. Sales declined the most in Talbot County as compared to last year (-37.5%). Dorchester County reported the highest median price growth of +34.6% from last year (from $189,500 to $255,000). Homes are selling fastest in Carroll, Frederick, Howard, and Harford counties with the median days on market being just 7 days.
Montgomery County is the most expensive real estate market in Maryland with a median sales price of $540,000. Allegany County is the least expensive real estate market in Maryland with the median sales price of $127,000.
- 8,665 units were sold in Oct, down 10.4% year-0ver-year.
- The average sales price was $431,461, up +7% year-0ver-year.
- The median price was $369,700, up +7.2% year-0ver-year.
- Total pending sales were 9,557 whereas in Oct 2020 there were 9,434.
- The ACTIVE INVENTORY was 9,631 units whereas in Oct 2020 it was 13,661 units for sale.
- MONTHS OF INVENTORY is 1.1 whereas in Oct 2020 it was 1.8.
- MEDIAN DAYS ON MARKET is 9 whereas in Oct 2020 it was 8.
- NEW LISTINGS were 9,944 whereas in Oct 2020 there were 11,451 new listings.
Baltimore Housing Market Trends 2021
Because of historically low-interest rates, the real estate market in Baltimore has been booming during the pandemic. The real estate market is currently performing exceptionally well. Baltimore's housing supply is consistent with the national trend of increased demand for single-family homes. Baltimore currently has only one month's worth of housing inventory available. The delinquency rate in Baltimore reached an all-time high of 9.4 percent during the pandemic, but it is now at 6.6 percent, up 2.3 percent year over year.
State of the Market
- In October, 1,178 housing units were sold in Baltimore County versus 1,168 last year, according to Maryland REALTORS® Monthly Statistics.
- The total number of units sold last month was higher than at this time last year, representing a 0.85% increase over October 2020.
- The median sale price was $299,000, up 6.8 percent or $19,000 more from the previous year.
- It means that sellers are increasing their prices in response to an increase in demand.
- The median sale price for Baltimore City was $210,000, an increase of 14.8% or $27,000 more as compared to last year.
- 896 homes were sold in Baltimore City in October versus 966 last year, a 7.2% drop in sales.
- The median days on market were 8 in Baltimore County and 14 in Baltimore City.
Baltimore County Housing Inventory
- The total number of available homes is down by 559 units or -37%.
- This October, the total number of active inventory was 955, compared to 1,514 in Oct 2020.
- Baltimore County had 0.9 months of supply available, compared to 1.6 in Oct 2020.
New Listings & Pending Sales
- In October there were 1152 homes newly listed for sale in Baltimore County compared to 1402 in Oct 2020, an increase of 17.8%.
- There were 1,202 current contracts (pending sales) compared to 1,133 a year ago.
- The number of pending sales is 6% higher than last October.
- Baltimore was a seller's market in August 2021.
- According to Realtor.com, in Aug 2021, the median list price of homes in Baltimore County was $300K, trending up 3.4% year-over-year.
- If Median Listing Price is trending up, the market may be “hot” and homes will likely be selling more quickly.
- Sellers have the advantage when prices are going up.
- The median listing price per square foot was $173.
- The median sale price was $296,100.
- Sale-to-List Price Ratio: 100%
- Ideally, a buyer would prefer a sale to ask price ratio that’s closer to 90%.
- The sellers in Baltimore have managed to hold good leverage in these negotiations in the past month.
- On average, they could sell homes for 100% of the asking price.
- A seller would always prefer scenarios that can yield a ratio of 100% or higher.
Greater Baltimore Housing Market Trends (October 2021)
Here are the latest monthly real estate trends for Greater Baltimore (the city and surrounding suburbs in Baltimore County) published by Bright MLS, the multiple listing service serving Baltimore and throughout the Mid-Atlantic region. Buyer interest in Baltimore Metro area homes fell slightly 1.7 percent in October according to the Bright MLS | T3 Home Demand Index. Between Sep and October, the index for the Baltimore Metro market region decreased slightly to a rating of 119, indicating a Moderate level of buyer demand.
Demand was strongest for higher-priced single-family homes and condos, both of which fell into the category of High demand. While demand for condominiums and townhomes softened in October, buyer interest in higher-priced single-family homes fell the most, by 12 percent.
For five of the six types of homes tracked by the Index, the months' supply of inventory remained relatively stable over the month. The monthly supply of higher-priced condos, on the other hand, increased to 3.2 from 2.8 and was also greater than any other segment. At 1.3 months, the supply of mid-priced single-family homes and lower-priced condos was the shortest.
October 2021 Housing Demand & Prices
- The Bright MLS | T3 Home Demand Index reported a 119 (“Moderate”) index, down 1.7% from September and down -12.5% from last October.
- The median sales price reached $335K in October 2021, a 4.7% increase over October 2020.
- While prices are still on the rise, the pace of price growth continues to slow in the region.
- Despite slower price appreciation, sellers continue to receive premiums.
- In October, the region's average sold-to-list price ratio was 101.1 percent, slightly lower than in September.
- On average, homes sold above list price in every jurisdiction in the region.
- Detached homes saw a -1.2% decline from the prior month with townhomes in line with September (0.4%).
- However, condos and co-ops fell -8%.
- Prices are up fastest in the city of Baltimore.
- The median sales price in the city was up 14.3% compared to a year ago.
Prices also rose quickly in Howard County, with the median price 12.5% higher than October 2020.
October 2021 Closed Sales
- According to Bright MLS, home sales in the Baltimore region fell 9.6 percent compared to the same month last year, reflecting an unusually busy fall last year.
- Additionally, sales were down compared to September.
- In recent years, home sales in the Baltimore region have tended to increase between September and October.
- Detached homes closed sales declined -8.4% from September.
- Townhomes and condo/co-ops declined -5.3% and -10.1%, respectively.
- Home sales activity slowed across the Baltimore region.
- The biggest slowdowns were in Harford County (down -17.2% compared to a year ago) and Anne Arundel County (-14.4%).
Baltimore Real Estate Market Forecast 2022
What are the Baltimore real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. It has a track record of being one of the best long-term real estate investments in the U.S. Since Dec 2011, the typical home value in Baltimore County has appreciated by around 36% (Zillow Home Value Index). Baltimore home values have gone up 12.8 percent over the past year alone. The typical value of homes in Baltimore County is currently $306,741.
It indicates that 50 percent of all housing stock in the area is worth more than $304,883 and 50 percent is worth less (adjusting for seasonal fluctuations). ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The supply is exceeding the demand, giving purchasers an advantage over sellers in price negotiations. In other words, there are more homes for sale than there are buyers in the marketplace. Baltimore is a seller's real estate market.
- The typical home value of homes in Baltimore-Columbia-Towson Metro is $349,655.
- Baltimore-Columbia-Towson Metro home values have gone up 12.8% over the past year and Zillow predicts they will rise 10.3% in the next twelve months.
- The typical value of homes in Baltimore County is $306,741, up 12.8% over the past year.
- Baltimore City is even more affordable with a typical home value being $190,836, up 16.3% over the past year and will continue to rise over the next twelve months.
Here is the Baltimore-area real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast until Oct 2022.
Baltimore Real Estate Investment: Should You Invest in Baltimore?
Now that you know where Baltimore is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Baltimore a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Baltimore is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021.
Baltimore looms large in American history. First settled in the 1600s, it was one of the largest cities in the U.S. in the colonial era. Today, it is often thought of as a distant suburb of Washington D.C., an industrial city on the decline. Yet this city is experiencing a turnaround that presents a unique opportunity for real estate investors. The Baltimore real estate market offers a variety of properties for buyers who are looking for a place to call home.
Baltimore is home to around 600,000 people. At first, the Baltimore housing market would seem like a bad investment since the city saw a nearly 5% drop in population from 2000 to 2010. This is a continuation of a decades-long flight from the city; between 1970 and 2000, the total population declined by almost a third. However, there is a significant opportunity in the Baltimore real estate market for investors, and not just because the metropolitan area is home to nearly three million people.
If you are looking to make a profit, you don’t want to buy the most expensive property in the Baltimore real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Baltimore that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom row houses are the most common housing units in Baltimore. Other types of housing that are prevalent in Baltimore include large apartment complexes, duplexes, single-family detached homes, and homes converted to apartments. Baltimore has a mixture of owners and renters, with 45.50% owning and 54.50% renting. Let’s take a look at the number of positive things going on in the Baltimore real estate market which can help investors who are keen to buy an investment property in this city.
The Student Market
If you want to invest in the Baltimore real estate market aimed at students, Baltimore is a rich target. The University of Maryland and John Hopkins University are two large pools of students in the Baltimore area, but they aren’t the only ones. Coppin State University is home to around 4000 students, while Morgan State University houses six thousand. The University of Baltimore has five thousand students enrolled, though this college is sometimes confused with the University of Maryland Baltimore campus of similar size. Johns Hopkins has around 20,000. If you’re more interested in the metro Baltimore real estate market, Towson University is also home to around 20,000 students.
The Baltimore housing market for students extends well past the neighborhoods immediately around big schools like Notre Dame of Maryland (5000 students) and Loyola (6000 students). You could buy rental properties around the Maryland Institute College of Art, Goucher College, or Sojourner-Douglass College. Note that the Baltimore housing market near Johns Hopkins also profits from the hospital of the same name, since that is one of the largest employers in the city.
A Huge Population of Working-Class Renters
Nationwide, around a third of the population rents. In Baltimore, just over 40% do. Baltimore stands out for its walkability and public transportation network. This helps explain why around two-fifths of those who rent don’t own a car, so properties in the Baltimore real estate market close to public transit command a premium. Interestingly, one in eight homeowners in Baltimore doesn’t own a vehicle, so they bid up the price of homes near bus and train stops, too. Given the largely working-class population in the city, many of these renters cannot afford homes selling for around $160 a square foot, so they’re guaranteed to rent for the long term. Given the relatively low cost of properties in Baltimore, this creates a surprisingly good return on investment for investors in the Baltimore housing market.
As of November 28, 2021, the average rent for a 1-bedroom apartment in Baltimore, MD is currently $1,347. This is a 12% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Baltimore decreased by -6% to $1,249. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment decreased by -2% to $1,350.
- The average rent for a 2-bedroom apartment in Baltimore, MD is currently $1,350, a 5% decrease compared to the previous year.
- The average rent for a 3-bedroom apartment in Baltimore, MD is currently $1,600, a 7% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Baltimore, MD is currently $1,850, a 3% increase compared to the previous year.
Baltimore’s Foreclosure Bounty
Foreclosure has made the news repeatedly for foreclosure abuse and extreme cases that led to the loss of homes. The rules result in people periodically losing their homes due to hundreds of unpaid utility bills. (A $350 water bill can be enough to start the process with the water authority. Baltimore also has a low threshold for foreclosing on properties for delinquent property taxes; the city can have a tax sale due to unpaid tax bills. In Baltimore City, a house may be placed in a tax sale if you are delinquent $750 in property taxes (or other municipal liens, including water bills).
In other counties, a homeowner has their home placed in a tax sale for as little as $250 in delinquent property taxes. This means there is an unusually large number of significantly discounted foreclosures in the Baltimore real estate market. Furthermore, the low thresholds result in reasonably well-kept homes hitting the Baltimore housing market via foreclosure sales after an unexpected budget crisis, not years of neglect by homeowners.
Limited Housing Inventory Causing Steady Appreciation
For those who want to buy a home, the market cannot meet demand. The Baltimore metro area has a low inventory of quality single-family homes relative to demand. This is why the median sales price in the first quarter of 2021 was $305,500, an increase of 11% from the previous year. Sales volume was up 14 percent year over year, but active listings were down, a symptom of declining inventories and faster turnaround. Median days on the market figure was just under 40 days, 8 days less than in 2017. This limited inventory relative to high demand will keep home prices growing for the foreseeable future.
Affordable Entry for Investors
After setting aside the possibility of snapping up homes by buying tax and utility liens, the Baltimore area remains an affordable metro area to invest in. There is a significant price variation. For example, homes in Baltimore City have a median sale price of around $225,000. At the other end of the market, the most expensive suburb of Baltimore, Howard County, had a median home sell for roughly $482K in June 2021. This means you can buy luxury homes in Baltimore’s suburbs that cost less than a fixer-upper in many hot markets.
The Job Hotspots
Amazon has set up several fulfillment centers in Baltimore. They’re taking advantage of Baltimore’s harbor, cheap real estate, and transportation links to the rest of the Northeast. Every one of these centers provides more than a thousand jobs, and the Baltimore housing market in their vicinity becomes hot because people move to where there is work. The Baltimore real estate market around the new industrial parks built to cater to Amazon will boom because we can expect as many jobs from Amazon’s suppliers in those areas as Amazon itself – and those workers will want to live close to work.
Pockets of Revitalization
Eighteen different neighborhoods in Baltimore were identified for renewal. East Baltimore in particular has been targeted for revitalization, and the money is already flowing in for projects. New infrastructure built by the city includes enhanced bus stops, dedicated bus lanes, rail improvements, and road improvements. They’re also tearing down old abandoned industrial buildings to open up large construction sites and giving tax breaks for new construction.
Investing in Baltimore real estate can be a worthy investment due to a steady rate of appreciation. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Should you consider Baltimore real estate investment? The Baltimore real estate market has been in decline for years, but several spots offer significant returns. And there are signs that the city is starting to turn around. Good cash flow from Baltimore investment properties means the investment is, needless to say, profitable.
On the other hand, a bad cash flow means you won’t have money on hand to repay your debt. Therefore, finding a good Baltimore real estate investment opportunity would be key to your success. If you invest wisely in Baltimore real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Baltimore and want to purchase property to rent out. The running costs for owning and managing a Baltimore rental property should not be high.
While hiring a property management company you should expect to give up roughly ten percent of the rent for each property they manage. Remember to factor this loss into your calculations when budgeting for a new rental property. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Baltimore investment property and you should be able to get a good return on your investment over the long term.
The neighborhoods in Baltimore must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Baltimore might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. The inventory is low, but opportunities are there.
Some of the popular neighborhoods in Baltimore are Guilford, Riverside, Mount Vernon, Fells Point, Federal Hill-Montgomery, Brooklyn, Canton, Inner Harbor, Charles Village, Belair-Edison, Bolton Hill, Roland Park, Remington, Homeland, and Locust Point.
Even as Baltimore's home prices have reached new heights, they are still near to the national average, and the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain. Millennial homebuyers can’t outbid real estate investors and hence end up renting. As with any real estate purchase, act wisely. Evaluate the specifics of the Baltimore housing market at the time you intend to purchase.
Hiring a local property management company can help in finding tenants for your investment property in Baltimore. If it is your first time investing in Baltimore real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property, and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your research or hiring a real estate investment specialist for guidance.
For most investors, buying or selling real estate is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Baltimore.
Consult with one of the investment counselors who can help build you a custom portfolio of Baltimore turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Baltimore.
Not just limited to Baltimore or Maryland but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Baltimore turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Maryland is bounded on its north by the state of Pennsylvania. Philadelphia is the largest city in Pennsylvania and the second largest on the East Coast. It is the sixth biggest city in the United States. The Philadelphia real estate market offers an ideal mix of affordable properties you can snap up and a large population of renters who aren’t going to buy homes any time soon. You won’t face the same hostility as a landlord as you might in New Jersey or New York, whether renting to long-term tenants or tourists.
Another hot real estate where you can invest for the long term is Harrisburg, PA. Baltimore is connected to Harrisburg through the BALTIMORE-HARRISBURG EXPRESSWAY. The expressway functions as an important commuter route between the Baltimore Beltway and the Cockeysville-Hunt Valley area and has aided commercial and industrial development along this corridor. Harrisburg has a more favorable legal and tax climate, and it is stable. That makes it a good choice for real estate investors as long as you are investing in rental income instead of massive capital gains. And you could still earn a lot of money with fix-and-flip in the Harrisburg housing market.
In the same state, you'd find the city of Pittsburgh, which is home to approximately 90 diverse and eclectic neighborhoods and many of them offer convenient access to downtown and urban amenities. The overall stability of Pittsburgh’s economic outlook has contributed significantly to the gains seen in the real estate market. Pittsburgh is seeing an incredible renaissance, unlike many other Rust Belt cities. It is attracting new residents, redeveloping its downtown. And it is an excellent place to invest in real estate while it is still in the early stages of its rebound.
Let us know which real estate markets you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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