The Baltimore real estate market has been experiencing significant since last year. Home prices have been steadily increasing, and the trend is expected to continue in 2023. This article will delve into the factors driving the Baltimore housing market and provide a forecast for what the future may hold for buyers and sellers.
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.
ALSO READ: Maryland Housing Market Forecast
Baltimore Housing Market Trends (Metro Area)
New Listings at a More than Two Decade Low
Buyers are increasingly frustrated by the lack of supply. In July, a total of 2,852 new listings came onto the market across the Baltimore metro area, which is down 38.7% compared to last July and is at a more than 20-year low. While elevated mortgage rates and growing affordability challenges have not deterred buyers, the persistently low inventory has subdued sales activity across the region.
Closed sales in July were down 18.4% compared to last year, while new pending sales tracked 16.9% lower. Buyer traffic is also down, with the number of showings 14.7% lower than last year at this time. However, fewer buyers in the market is not a result of cool demand but rather a lack of inventory. At the end of July, there were just 3,667 total listings available for sale. Supply had started to increase earlier this year, but inventory is now 21.1% lower than a year ago.
Buyers need to act quickly, particularly in the region’s suburban markets where there is only about a month’s supply of inventory. The median days on the market in the Baltimore region was 7 in July, meaning half of all homes sold in a week or less.
Bright MLS T3 Home Demand Index
According to the Bright MLS T3 Home Demand Index (HDI), market activity declined in August of 2023, largely due to limited inventory. The index for the Baltimore metro was 86, which indicates Slow market conditions, falling from 97 last month. The index for the Baltimore metro down from 115 a year ago, meaning Steady demand during that time.
In the Baltimore metro area, the fall market will be characterized by low inventory, stable or rising home prices, and growing affordability challenges. Mortgage rates will begin to come down but likely will remain around 6.5% into the fall. The housing market will remain competitive. With prices high, prospective homebuyers likely will have to compromise on home or neighborhood characteristics, or both, in order to be successful. It will still be a seller’s market. New listing activity will remain low as many homeowners are still locked in the “golden handcuffs” of a low mortgage rate that inhibits any plans for selling.
Closed Sales Year-Over-Year Change
There were 2,784 close sales in July. Sales are down 18.4% from last year and down 28.8% from 2019, a more normal year in the market. There is usually a drop in closed sales between June and July, but sales are particularly low this year due to limited supply and high mortgage rates.
Median Sales Price Year-Over-Year Change
The median sales price increased again in July, up 2.9% from last year. In June, the region’s median price reached an all-time high, but in July prices came down slightly to $380,000. Attached homes in the area are the only home type to come down in price year-over-year, with the median price down 1.7% to $290,000.
Median Days on Market
For the 2nd month in a row, the median days on market remained unchanged compared to a year ago, at 7 days. Even though the median days on market for all home types are up 1 day from last month, the limited availability of homes means sales are still happening very quickly. Compared to a more typical year, like 2019, homes are selling a little over twice as fast.
New Pending Sales Year-Over-Year Change
New pending sales are only 69% of what they were in 2019. At 3,083 new pendings in July, sales activity is down 30.9% from last year and down 5.2% from last month. Condos, especially, have taken the hardest hit with new pending sales declining 24.2% year-over-year.
Active Listings Year-Over-Year Change
There were 3,667 listings at the end of July, which is down 21.1% overall from last year. This is the second month in a row with a year-over-year drop in inventory, as supply remains at historically low levels. Active listings are also down from last month; however, there have been 3 months in a row of increases in the number of condo listings available.
Home prices rose strongly in many suburban markets in the Baltimore region, with the fastest price appreciation in July in Howard County (+15.4%). Prices have been weaker in Baltimore City where the median price has fallen in 6 of the past 7 months. Despite these declines, the city’s median price is still nearly 30% higher than it was before the pandemic.
New listings are down more dramatically in the Baltimore region than in most other parts of the Mid-Atlantic. In Howard County and Carroll County, the number of new listings coming onto the market in July was down more than 40% compared to a year ago. Inventory is tightest in Howard County where there is just 0.84 months of supply.
Homes continue to sell very quickly in the region. Even in Baltimore City, where the market is less frenzied, the typical home sold in just 11 days in July.
Overall, the Baltimore metro housing market in July 2023 is characterized by a significant shortage of new listings, leading to decreased sales activity and a highly competitive seller's market. Despite challenges such as elevated mortgage rates and affordability concerns, the limited inventory remains the dominant factor influencing market dynamics. As the fall season approaches, the market is expected to maintain its competitive nature, with low inventory and stable-to-rising home prices. Prospective homebuyers are likely to encounter the need for compromises in their home search due to the scarcity of available properties.
Baltimore Housing Market Forecast 2023-2024
What are the Baltimore real estate market predictions? The Baltimore housing market has experienced notable changes in recent times, with key indicators pointing towards shifts in home values, market activity, and buyer-seller dynamics. Let's delve into the latest insights and forecasts to better understand the current state of the Baltimore real estate market.
Current Market Trends
Zillow reports that the average home value in the Baltimore-Columbia-Towson area stands at $372,577, reflecting a 3.6% increase over the past year. Additionally, homes in this region are going pending within approximately 6 days, indicating a highly competitive market environment. These numbers, based on data through July 31, 2023, illustrate the brisk pace at which the Baltimore housing market operates.
Further insights reveal that the median sale to list ratio as of June 30, 2023, is 1.006. This metric suggests that, on average, homes are selling at slightly above their listed prices. Additionally, 55.8% of sales are occurring above the list price, while 24.0% of sales are happening under the list price, showcasing the varied negotiation dynamics in the market. The median days to pending as of July 31, 2023, is 6 days, indicating the rapid pace at which properties are being snatched up.
Based on the 1-year market forecast as of July 31, 2023, experts anticipate a 3.4% increase in home values over the coming year. This projection suggests continued growth in property values, albeit at a slightly slower pace than the previous year. It's essential to note that market conditions can be influenced by various factors, including economic trends, interest rates, and overall demand.
Is Now a Good Time to Buy a House in Baltimore?
The decision to buy a house is a significant one and depends on various factors, including your personal financial situation, long-term goals, and market conditions. Despite the competitive nature of the Baltimore housing market, the relatively short median days to pending suggests that well-priced and desirable properties are getting snatched up quickly. If you're considering buying a house in Baltimore, it's advisable to be prepared, have a clear understanding of your budget, and work with a knowledgeable real estate professional.
Buyers or Sellers Market?
The current dynamics of the Baltimore housing market indicate a seller's market. This conclusion is drawn from the high percentage of sales occurring over the list price (55.8% as of June 30, 2023), the rapid pace at which homes are going pending (6 days as of July 31, 2023), and the general competitiveness of the market. In a seller's market, there is limited inventory compared to high demand, which gives sellers more negotiating power.
Hence, the Baltimore housing market remains vibrant and competitive. Home values have shown steady growth, and the market favors sellers due to high demand and limited inventory. As you navigate the real estate landscape, it's crucial to stay informed, work with professionals, and make decisions aligned with your long-term goals.
Baltimore Real Estate Investment: Should You Invest in Baltimore?
Baltimore is a city with a rich history and culture, and it's also becoming an attractive location for real estate investors. With the rise of Baltimore's economy, population growth, and real estate market, it's no wonder that more and more investors are considering Baltimore for their next investment opportunity. If you're wondering whether Baltimore is a good place to invest in real estate, you've come to the right place. In this section, we'll take a look at the top eight reasons why investing in Baltimore could be a smart move for your real estate portfolio.
- Affordable Real Estate Prices: Baltimore is known for its affordable real estate prices, especially when compared to other major cities in the U.S. Investors can purchase properties for a fraction of the price they would pay in cities like New York, Los Angeles, or San Francisco. Additionally, Baltimore's real estate market has been on an upward trend over the past few years, making it a great time to invest.
- Strong Rental Market: Baltimore's rental market is thriving due to a combination of factors, including a growing population and a relatively low cost of living. Investors can take advantage of this by purchasing properties and renting them out to tenants. Additionally, many large companies are headquartered in Baltimore, which can provide a steady stream of potential renters.
- Growing Population: Baltimore's population has been steadily increasing over the past few years, with projections indicating that this trend will continue. A growing population means more demand for housing, which can drive up property values and rental prices. This makes it an attractive option for real estate investors.
- Diverse Economy: Baltimore's economy is diverse, with a variety of industries driving its growth. This includes healthcare, technology, finance, and education. A diverse economy can provide stability for real estate investors, as it is less likely to be affected by downturns in any one industry.
- Proximity to Major Cities: Baltimore is located within a few hours' drive of several major cities, including Philadelphia, Washington D.C., and New York City. This makes it an attractive location for people who work in these cities but want to live in a more affordable area. As a result, the demand for housing in Baltimore is likely to remain strong.
- Historic Charm: Baltimore is known for its historic architecture and charm. Many of its neighborhoods have a unique character and appeal to renters and buyers alike. This can make it easier to attract tenants and can also help drive up property values.
- Access to Higher Education: Baltimore is home to several prestigious universities, including Johns Hopkins University and the University of Maryland. This can attract students and faculty members who need housing, as well as researchers and other professionals who work at these institutions.
- Investment Incentives: The city of Baltimore offers a variety of incentives to real estate investors, including tax credits and exemptions. Additionally, there are several programs designed to encourage investment in certain areas of the city. These incentives can help investors maximize their returns and make Baltimore an even more attractive option for investment.
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, and 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.