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. It is often thought of as a distant suburb of Washington D.C. today, an industrial city on the decline. Yet this city is experiencing a turn around 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. The Baltimore housing market at first blush 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 significant opportunity in the Baltimore real estate market for investors, and not just because the metropolitan area is home to nearly three million people.
Is Baltimore going to be a sizzling real estate market for investors in 2020? Baltimore real estate appreciation rate in the latest quarter was around 1.9%. However, it is quite unclear whether it would remain steady or not. Looking at the positive forecast, the annual appreciation rate is predicted to be between 7% to 8%. 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 high potential for return on investment, you should consider Baltimore in 2020. In this article, our focus will be on the current state of the Baltimore real estate market and how it can affect the investors and home buyers.
Baltimore Real Estate Market Forecast 2020 – 2021
What are the Baltimore real estate market predictions for 2020? 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 2015, the median home prices in Baltimore have appreciated by roughly 18% from $127,000 to $149,959, according to Zillow’s index.
In the past year, the Baltimore real estate market cooled off, the prices rose by a mere 1.6%. The latest Baltimore real estate market forecast is that the home prices will increase by 3.9% in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Baltimore is $316,396. Baltimore is currently a buyer’s real estate market.
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. Zillow reports that 18.4% of the listings in Baltimore had a price cut in Jan 2020, which is a good thing for buyers.
Here is the Baltimore real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 3.9% until Jan 2021.
Baltimore Housing Market Forecast 2021
The Baltimore housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Baltimore housing market trend prediction is 83%. Accordingly, LittleBigHomes.com estimates that the probability of rising home prices in Baltimore is 83% during this period. If this Baltimore Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Baltimore Real Estate Market Forecast.
Latest Baltimore Real Estate Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Baltimore area from multiple sources and compare them with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Baltimore is a moderately walkable city in Maryland with a population of approximately 620,567 people. Low demand and high inventory in the Baltimore housing market led to the market cooling off in 2019. In the past ten years, the annual real estate appreciation rate has amounted to 0.43% in Baltimore, according to NeighborhoodScout. This is considerably below the state and national level average rise in real estate prices.
On average, homes in Baltimore, MD sell after 84 days on the market. The trend for median days on market in Baltimore, MD has gone up since last month, and slightly up since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Baltimore market can tip to favor sellers if the supply decreases to less than six months of inventory. As per Zillow’s forecast, the prices may rise by 3.6% in the next 12 months. However, looking at the current trends, Baltimore might be heading for a balanced real estate market in the next few months before it becomes a warm seller's market.
Following the housing market decline in 2007, single-family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
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. The median house price in Baltimore is $169,380, which indicates that home prices in Baltimore are near the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in some of the popular neighborhoods in or around Baltimore.
Baltimore Real Estate Inventory And Sales Data
Baltimore has a mixture of owners and renters, with 45.50% owning and 54.50% renting. In the past month, 661 homes have been sold in Baltimore on Redfin.com, a national real estate brokerage. Additionally, there were also 375 condos, 2856 townhouses, and 23 multi-family units for sale in Baltimore last month. The median listing price is around $170,000. The average sale price of a home in Baltimore was $145,000 last month, up 7.5% since last year. The average sale price per square foot in Baltimore is $105, up 1.9% since last year.
According to their statistics, the Baltimore housing market is moderately competitive. Homes in Baltimore receive 1 offer on average and sell in around 51 days. A hot listing in the market can sell for about 1% above list price and go pending in around 19 days.
Currently, there are 599 homes for sale in Baltimore on Zillow, an online real estate database company. Additionally, there are 499 homes for rent. Under potential listings, there are about 75 Foreclosed and 832 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS). The median list price per square foot in Baltimore is $134, which is lower than the Baltimore-Columbia-Towson Metro average of $184. The median price of current listings in Baltimore is $154,900 and the median price of homes that have been sold is $107,100. The median rent price in Baltimore is $1,350, which is lower than the Baltimore-Columbia-Towson Metro median of $1,599.
Trulia has 3932 resale and new homes for sale in Baltimore, MD, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sale price in Baltimore is $230,000 and homes are selling for about $168/sqft.
As you can see in the graph, there was a steep decrease in Baltimore home prices from Oct 2018 to Jan 2019. From March 2019 till Aug 2019, the median sales price saw a steep increase. Currently, home prices are stable in the region.
There are currently 3799 homes for sale and 1809 homes for rent in Baltimore on Realtor.com, a real estate listings website. According to their statistics, in January 2020, the Baltimore housing market was a balanced market, which means there was a healthy balance of buyers and sellers in the market. The median list price of homes in Baltimore, MD was $185,900 in January 2020, trending down -2.1% year-over-year. The median listing price per square foot was $131 and the median sale price was $160,000.
The asking price of single-family homes in Baltimore can start from $10,000 and can go up to $4.6M for a luxury property located in the Towson neighborhood. Towson is an expensive neighborhood in Baltimore with a median price of $350,000. Locust Point has a median listing price of $458,000, making it the most expensive neighborhood in Baltimore. Carrollton Ridge is the most affordable neighborhood, with a median listing price of $10K.
| Homes For Sale | 3799 |
| Homes For Rent | 1809 |
| Median Listing Price | $185,900 |
| Median Sale Price | $160,000 |
| Sale to Asking Price Ratio | 100% (Jan 2020) |
| Median Rent | $1,690 |
| New Listings | 542 |
| New Construction Houses | 49 |
| Median Listing Home Price/Sq Ft | $131 |
| Home Price Range | $1.4K to $12.5M |
| Most Expensive Neighborhood | Locust Point |
| Most Affordable Neighborhood | Carrollton Ridge |
Ideally, a buyer would prefer a sale to asking 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.
According to Movoto.com, the median list price in Baltimore is $174,999. The median list price in Baltimore was less than 1% change from February to March. Baltimore's home resale inventories are 2,358, which increased by 0 percent since February 2020. The median list price per square foot in Baltimore is $136. In February 2020 it was $134. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in March.
Baltimore Foreclosures And Bank Owned Homes Statistics 2020
As per Zillow’s data, in Baltimore 2.5 homes are foreclosed (per 10,000). This is greater than the national value of 1.2. The percent of delinquent mortgages in Baltimore is 2.8%, which is higher than the national value of 1.1%. The percent of Baltimore homeowners underwater on their mortgage is 26.5%, which is higher than Baltimore-Columbia-Towson Metro at 12.4%.
There are currently 1,079 properties in Baltimore, MD that is in some stage of foreclosure (default, auction, or bank-owned) while the number of homes listed for sale on RealtyTrac is 2,478. In January 2020, the number of properties that received a foreclosure filing in Baltimore, MD was 4% higher than the previous month and 38% lower than the same time last year.
| No. of Foreclosures in Baltimore | 1079 (RealtyTrac) |
| Homes for Sale in Baltimore | 2478 |
| Recently Sold | 7366 |
| Median List Price | $155,000 (10% drop vs Dec 2018) |
In Baltimore, the zip code with the highest foreclosure rate is 21229, where 1 in every 443 housing units is foreclosed. 21213 zip code has the lowest foreclosure rate, where 1 in every 760 housing units becomes delinquent.
Why Should You Invest in The Baltimore Real Estate Market?
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 the real estate investors and buyers in 2020.
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.
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.
1. 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 as low as $250.
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.
2. 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.
3. 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.
4. The Good Return on Investment
The median rent for apartments in Baltimore was around $1500 a month as of August 2018. Given the large 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.
5. Limited Inventory
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 of a Baltimore metro home was up nearly 2% or $4000 over its 2017 price. Sales volume was up half a 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 demand will keep home prices stable for the foreseeable future. This is partly because the Baltimore real estate market is already essentially built up; you have to tear something down to build something new.
6. 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. The ten-year average price for homes in the area was around $220,000; the January 2018 metro area median sale price was nearly $240,000. Townhomes averaged $170,000 while condos cost an average of just under $200,000. And there is a significant variation in price.
For example, homes in Baltimore City had a median sale price of around $90,000. At the other end of the market, the most expensive suburb of Baltimore, Howard County, had a median home sell for roughly $370,000 in January 2018. This means you can buy luxury homes in Baltimore’s suburbs that cost less than a fixer-upper in many hot markets.
7. A Hidden Luxury Market
Depending on which metric you use, many parts of the city have up to a third of residents living at or near the poverty line. Those areas are primarily in downtown. However, there is no such issue in the upscale Inner Harbor or North Baltimore. This market is so strong that new luxury apartments are being built near the harbor.
8. 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.
9. The Co-working Boom
Baltimore is home to a surprisingly large number of coworking spaces. This can be seen as an extension of digital nomads and college students choosing to work in social spaces instead of in their home office. Affordable Baltimore real estate that can cater to the people working there are well-situated to profit off this trend, and that’s aside from the possibility of setting up co-living spaces.
10. 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.
Baltimore Investment Properties: Real Estate Investment
Investing in the 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.
A bad cash flow, on the other hand, 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 the 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 a 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 to invest 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.
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.
Buying or selling real estate, for a majority of investors, 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.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you’re seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States. They’re choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it's even harder to take out a mortgage for those who have student loan debt.
Baltimore & Nearby Real Estate Investment Opportunities
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, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
- Foreclosures
http://www.baltimoresun.com/news/opinion/editorial/bs-ed-tax-sales-20170604-story.html
http://www.baltimoresun.com/news/opinion/oped/bs-ed-tax-sale-reforms-20141028-story.html
https://www.realtytrac.com/statsandtrends/foreclosuretrends/md/baltimore-city-county/baltimore/ - Demographics
http://graphics.wsj.com/baltimore-demographics/ - Inventory
http://www.rbintel.com/blog/baltimore-area-housing-market-kicks-2018-lowest-inventories-2005 - Luxury market
https://www.bizjournals.com/baltimore/news/2018/06/19/take-a-glimpse-inside-the-modern225-north-calvert.html/ - Universities
https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_Baltimore - Rental Pool
http://www.pewresearch.org/fact-tank/2017/07/19/more-u-s-households-are-renting-than-at-any-point-in-50-years - Amazon
https://wtop.com/business-finance/2017/11/maryland-gets-4th-amazon-fulfillment-center-1500-jobs - Co-working / co-living
https://technical.ly/baltimore/2016/06/24/best-coworking-spaces-baltimore - Revitalization
https://www.baltimorecountymd.gov/Agencies/planning/neighborhoodresponse/commrevitalization/
https://foxbaltimore.com/news/local/east-baltimore-neighborhoods-get-30m-grant-for-revitalization - Housing Market Data, Trends, and Statistics
https://www.zillow.com/baltimore-md/home-values
https://www.redfin.com/city/1073/MD/Baltimore/housing-market
https://www.realtor.com/realestateandhomes-search/Baltimore_MD/overview
