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.
According to NeighborhoodScout's data, Baltimore's appreciation rate has been at 7.12 percent over the last twelve months. Baltimore's appreciation rate in the most recent quarter tracked by them was 2.51 percent. In comparison to the rest of Maryland, Baltimore's most recent annual appreciation rate is lower than 90% 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.
ALSO READ: Maryland Housing Market Forecast
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 Housing Market Trends for 2023
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 – Feb 2023
According to Maryland REALTORS® Monthly Statistics for February 2023, Baltimore City had 562 homes sold in 2022 and 814 homes sold in 2023, which represents a decrease of 31.0%. In terms of housing prices, the median home price in Baltimore City was $191,000 in 2023, which is a decrease of 4.5% from the previous year. Baltimore County had 516 homes sold in 2022 and 703 homes sold in 2023, which represents a decrease of 26.6%. The median home price in Baltimore County was $300,000 in 2023, which is an increase of 0.8% from the previous year.
Baltimore City had a median of 25 days on the market for homes in 2023, which is an increase of 20% from the previous year. Baltimore County had a median of 14 days on the market for homes in 2023, which is an increase of 8 days from the previous year. In terms of months of inventory, Baltimore City had a total of 1.9 months of inventory in 2023, which is an increase from the previous year. Baltimore County had a total of 0.9 months of inventory in 2023, which is also an increase from the previous year.
Greater Baltimore Housing Market Report
According to the Bright MLS, the Baltimore metro area housing market saw a sluggish performance in February 2023, with rising mortgage rates and a lack of inventory contributing to lower market activity. The number of new pending sales increased, but not at the expected rate leading up to the spring market.
New listing activity was at a low, with limited inventory available to move into and the reluctance of sellers to give up low mortgage rates. However, despite low buyer activity, competition remains high, causing prices to continue rising. The following sections will delve into the specifics of the market report by Bright MLS.
Bright MLS T3 Home Demand Index
According to the Bright MLS T3 Home Demand Index (HDI), the Baltimore metro area housing market activity declined from February 2022, with an HDI of 78 indicating slow market conditions. However, it is similar to the previous month's index of 80 and lower than the 108 reported a year ago.
Closed Sales Year-Over-Year Change
February 2023 saw 1,981 closed sales in the Baltimore metro area, a 23.8% decline compared to the previous year. However, closed sales have picked up momentum, increasing by 16.5% between January and February, indicating a promising start to the spring buying season.
Median Sales Price Year-Over-Year Change
The median sale price of homes in the Baltimore metro area was $329,000, up 2.8% from the previous year. Detached homes saw a year-over-year increase of 6.3% in prices, while condo prices fell 3.8%, the first decline since June 2020.
Median Days on Market
The median days on market for homes in the Baltimore metro area was 17 days in February 2023, down from the previous month's 22 days, but still more than the 10 days reported in February 2022. All property types saw a decrease in median days on market in February compared to January.
New Pending Sales Year-Over-Year Change
New pending sales in the Baltimore metro area rose for the past two months, with 2,590 new pending sales in February 2023, a 23.7% decline from the previous year. However, the percentage decline has improved since November 2022.
Most local markets in the Baltimore metro area remain competitive due to low inventory levels, despite fewer buyers in the market in February. Howard County saw the largest gain, with a 14.9% increase in median price compared to the previous year, while prices in Baltimore City fell for the second month in a row. Inventory has increased slightly, but supply remains low in most suburban jurisdictions, with less than one month of supply at the end of February. Homes are taking longer to sell in many parts of the Baltimore region, with the median days on market at 29 in Baltimore City, but only eight in Howard County.
The Baltimore metro area housing market saw a sluggish performance in February 2023, with a lack of inventory and rising mortgage rates contributing to lower market activity. However, closed sales and new pending sales have increased, indicating a promising start to the spring buying season. Competition remains high, causing prices to continue rising, especially in most local markets where inventory is still very low.
Based on this report, it appears that buyers and sellers in the Baltimore housing market can expect continued low inventory levels, which may lead to continued competition among buyers for available properties. The low inventory may also cause sellers to hold off on listing their homes until they have a place to move to. Additionally, rising mortgage rates may discourage some buyers from entering the market or may limit the number of homes they can afford.
However, the rebounding housing market reflects the fact that buyers are adjusting to the “new normal,” which will include higher mortgage rates. While supply will remain a major constraint in the Baltimore region, particularly in suburban markets, buyers who are able to find and secure property will likely see continued price appreciation. On the other hand, sellers who are able to list their homes may benefit from the strong demand and limited inventory by receiving multiple offers and potentially selling their homes for a higher price.
Baltimore Housing Market Forecast 2023
What are the Baltimore real estate market predictions? Based on the data provided by Zillow, the Baltimore housing market is expected to continue its upward trend in 2023. The average home value in Baltimore County is $310,288, which is up by 3.7% compared to the previous year. Similarly, the average home value in the Baltimore-Columbia-Towson metropolitan statistical area (MSA) is $344,786, showing a 4.0% increase from the previous year.
Additionally, the median sale-to-list ratio for homes in Baltimore County and the Baltimore-Columbia-Towson MSA is 1.000, indicating that homes are selling for their asking price. The data also shows that 36.6% of homes in Baltimore County are selling over their list price, while 36.6% of homes are selling under their list price. In the Baltimore-Columbia-Towson MSA, 34.4% of homes are selling over their list price, while 38.7% are selling under their list price.
The median days to pending for homes in Baltimore County and the Baltimore-Columbia-Towson MSA is 12 and 14 days respectively, which indicates a fast-paced market where homes are selling quickly.
Looking at the home values in different cities within Baltimore County, Lutherville Timonium has the highest average home value at $443,615, followed by Cockeysville at $437,404, and Towson at $410,149. On the other hand, Parkville has the lowest average home value at $238,739.
Overall, the Baltimore housing market seems to be strong and is expected to continue its upward trend in 2023. However, as with any market, there may be fluctuations and it's important for buyers and sellers to stay informed and work with a knowledgeable real estate agent to make informed decisions.
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.