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 11.02 percent over the last year. Baltimore's appreciation rate in the most recent quarter was 0.72 percent, which equates to 2.92 percent (annual appreciation). In comparison to the rest of Maryland, Baltimore's most recent annual appreciation rate is higher than 50% of the other cities and towns in Maryland.
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.
Statistics from Bright MLS show that The Baltimore metro area housing market began to slow before the markets in Philadelphia or Washington, DC. Historically, the Baltimore market has been more subject to economic headwinds such as increased mortgage rates and inflation than the other two metro areas.
While inventory continues to rise in the Baltimore area as demand falls, home prices are projected to rise more slowly in the coming months. Despite three consecutive months of inventory growth, supply remains very restricted in the Baltimore region. In July 2022, there was 1.21 months of supply in the metro area. But in some local markets, inventory is even tighter. On the other hand, Zillow forecasts a decline of 0.5% between July 2022 to July 2023 in Baltimore-Columbia-Towson Metro home values.
Baltimore County Housing Market Trends – July 2022
Because of historically low-interest rates, the real estate market in Baltimore was booming during the last two years. Despite rising rates, the real estate market is currently performing well. Baltimore's housing supply is consistent with the national trend of increased demand for single-family homes. Baltimore currently has less than one month's worth of housing inventory available.
State of the Market
- In July 2022, 862 housing units were sold in Baltimore County versus 1,295 last year, according to Maryland REALTORS® Monthly Statistics.
- The total number of units sold last month was lower than at this time last year, representing a 33.4% decrease over July 2021.
- The median sale price was $325,000, up 6.6 percent 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 $245,000, an increase of 8.9% as compared to last year.
- 764 homes were sold in Baltimore City in July 2022 versus 999 last year, a 23.5% drop in sales.
- The median days on market were 7 in Baltimore County and 12 in Baltimore City.
Baltimore County Housing Inventory
- The total number of available homes is down by 322 units or -23.6%.
- This July, the total number of active inventory was 1,041, compared to 1,363 in July 2021.
- Baltimore County had 1.0 months of supply available, compared to 1.3 months in July 2021.
New Listings & Pending Sales
- In July there were 1219 new homes listed for sale in Baltimore County compared to 1545 in July 2021, a decrease of 21%.
- There were 986 current contracts (pending sales) compared to 1,203 a year ago.
Baltimore Listing Price Trends 2022
- Baltimore was a seller's market in April 2022 as it had a total sales-to-total listings ratio above 0.2 which tends to favor sellers.
- According to Realtor.com, in July 2022, the median list price of homes in Baltimore County was $339.9K, trending up 6.3% 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 sale price was $325K.
- Sale-to-List Price Ratio: 100.06%
- Ideally, a buyer would prefer a sale-to-ask price ratio that’s closer to 90%.
- A seller would always prefer scenarios that can yield a ratio of 100% or higher.
Greater Baltimore Housing Demand Drops in July
According to the Bright MLS T3 Home Demand Index (HDI), buyer demand has been tracked lower than last year. The index for the
Baltimore metro area was 114 in July (Moderate), down from 124 a year ago (Moderate) and down slightly from June (116). Demand dipped slightly between June and July for higher-priced homes and condominiums in Baltimore. Buyer demand remained steady for moderate-priced homes and condominiums in July.
Here are the key findings 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.
The pace of home sales activity in the Baltimore metropolitan area continues to slow as purchasers retreat in the face of rising mortgage rates and stubbornly high inflation. Sales in the region have been declining since December 2021. Despite this downturn, sales activity in Baltimore has increased. During 2019, the region remained higher than the sales totals.
Prices in the Baltimore metropolitan area continue to climb but at a slower rate. price growth has decelerated. The median sales price in July was $369,450 in the region, a 5.3% rise over the previous year. There were 4,648 active listings across the country at the end of July. Baltimore region, an 18.7% gain from a year ago and the 3rd Month after month of year-over-year inventory growth.
The rise in supply is being driven by slower sales activity, as the number of new listings continues to fall short of last year's levels. Despite an expansion of inventory, there remain only 1.21 months of supplies in the Baltimore area and the total stockpile remains below half of what it was in 2019.
There were 3,411 closed sales in July across the Baltimore metro area, the lowest July sales total since 2014. Sales were down 24.5% compared to a year ago, reflecting a pullback in buyer activity. The number of sales declined by about 24% in July for all housing types—single-family detached, attached/townhomes, and condominiums.
Home sales activity continues to slow in the Baltimore metro area. Sales are down in all local markets in the region, with the sharpest
year-over-year decline in Howard County (-30.4%). Sales were also down in Baltimore City, but the city was the only market where July 2022 sales topped July 2019 sales. Prices continue to rise in the region, though at a slower pace. The fastest price growth in July was in Carroll County, where the median price was up 11.9% compared to a year ago. The slowest price growth was in Howard County (+3.6%).
Baltimore Real Estate Market Forecast 2022-2023
What are the Baltimore real estate market predictions for 2022 to 2023? 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 the last decade (Sept 2012), the typical home value in Baltimore County has appreciated by around 47.8% (Zillow Home Value Index).
<<<Also Read: Maryland Housing Market Forecast>>>
Baltimore home values have gone up 9.9 percent over the past year alone. The typical value of homes in Baltimore County is currently $332,726. It indicates that 50 percent of all housing stock in the area is worth more than $332,726 and 50 percent is worth less (adjusting for seasonal fluctuations). 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 $377,480.
- Baltimore-Columbia-Towson Metro home values have gone up 9.5% over the past year.
- Zillow predicts that home values will decline by 0.5% between July 2022 to July 2023.
- Baltimore City homes are affordable with a typical home value being $205,016, up 10.% over the past year.
Here is the Baltimore-area real estate price appreciation graph by Zillow since 2012.
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 2022 or 2023.
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 September 02, 2022, the average rent for a 1-bedroom apartment in Baltimore, MD is currently $1,325. This is a 4% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Baltimore increased by 5% to $1,250. The average rent for a 1-bedroom apartment decreased by -3% to $1,325, and the average rent for a 2-bedroom apartment remained flat.
- The average rent for a 2-bedroom apartment in Baltimore, MD is currently $1,550, an 11% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Baltimore, MD is currently $1,625, a 2% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Baltimore, MD is currently $1,900, a 10% decrease 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 on $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 January 2022 was $318K, an increase of 6% from the previous year. January 2022 was the 3rd month with less than a one-month supply of homes and the fourth month where levels fell by -20% or more from a year ago. The constricted inventory kept sellers in the driver’s seat, with units typically going for the full asking price.
Sales volume was down 10 percent year over year, but active listings were down to a nineteen-year low, reflecting the ongoing need for housing in the metro. It is a symptom of declining inventories and a faster turnaround. The median days on the market figure rose seasonally up +1 day from a year ago. While days on the market continued to tick up month-to-month, homes are still moving quickly relative to prior Januarys over the past five years. 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 duplexes and triplexes 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, 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.
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