The real estate market in Baltimore is thriving, with days on market reaching an all-time low. As the Baltimore Sun reports, suburban areas around Baltimore such as Joppa and Laurel are seeing homes sell in as little as six days.
Nicknamed the “City of Neighborhoods," Baltimore is home to literally hundreds of different districts providing plenty of options for real estate investors.
Gentrifying neighborhoods including Federal Hill/Locust Point and Woodberry/Hampden are named by Baltimore Magazine as some of the hottest ‘hoods where homes are selling like hotcakes. The good news for investors is that real estate prices in many parts of the city are lower than the surrounding counties and nearby Washington, DC.
Founded in 1729, the city is a major historical destination and played a key role during the American Revolution. Baltimore was originally a working-class port town with a focus on shipping, transportation and manufacturing.
Today, Baltimore is the economic and cultural hub of Maryland, and known for its diverse economy, dynamic Inner Harbor near the Chesapeake Bay, and the world-renowned Johns Hopkins Hospital.
Keep reading to learn why investors are loving the Baltimore real estate market in 2021.
After reversing decades of population loss, the population of Baltimore is once again stable and slowly growing. In fact, the city itself accounts for nearly 25% of the total population in the region.
Key Population Stats:
- City of Baltimore is home to more than 620,000 residents with about 2.8 million people in the metropolitan area and nearly 9.8 million in the Baltimore-Washington-Arlington CSA.
- Most populated city in Maryland and the 30th-most populous city in the U.S.
- Population of the Baltimore Region declined by 0.19% last year and has grown by about 13% since 1998.
- Although the population of the City of Baltimore is slowly decreasing, immigrants are helping to slow the loss.
- Baltimore is only 40 miles from Washington D.C.
- About 51% of the population is between the ages of 20 and 59.
- Median age in Baltimore is 38.6 years.
Baltimore’s proximity to Washington D.C. has led to years of federal investment. As the economy continues to recover, employment sectors such as construction, manufacturing, trade and transportation, and financial activities are showing the fastest growth, according to the BLS.
The region is home to various agency headquarters including the National Security Agency, Social Security Administration, and the U.S. Cyber Command. As a recent report noted, macro factors and local talent are making cybersecurity a growing industry throughout the region and the State of Maryland.
Key Employment Stats:
- GDP of Baltimore-Columbia-Towson MSA is more than $215.4 billion, according to the Federal Reserve Bank of St. Louis, and has grown by more than 44% over the past ten years.
- Job growth in Baltimore last year declined by 0.53% while the unemployment rate is currently 7.2% as reported by the BLS (Oct. 2020).
- Average annual salary in Baltimore is $57,740 vs. $51,960 U.S. average, according to U.S. News & World Report.
- Median household income in Baltimore is $83,160 while per capita income is $43,139.
- Targeted growth industries in the Baltimore Region are life sciences, IT, logistics, manufacturing, healthcare, agriculture, and energy.
- Top employers in Baltimore County are the Social Security Administration and Centers for Medicare and Medicaid, T. Rowe Price, Community College of Baltimore, Greater Baltimore Medical Center, Towson University, McCormick and Company, and Lockheed Martin.
- Biggest biotechnology parks in Baltimore are the Science + Technology Park at Johns Hopkins and University of Maryland BioPark.
- Business incubators in Baltimore include B-More Kitchen, BioInnovation Center, Harbor Designs & Manufacturing Innovation Center, and LifeBridge BioIncubator at Sinai Hospital.
- Baltimore ranks #4 among the top 25 largest metro areas for density of advanced degree holders and is among the top 3 large U.S. metro areas for IT jobs including computer network support specialists, computer hardware engineers, and information systems analysts.
- Major colleges and universities in the Baltimore area include Community College of Baltimore County, College of Notre Dame of Maryland, Johns Hopkins University, and Loyola University Maryland.
- 91.6% of the Baltimore County residents have a high school diploma or higher, and 41.9% hold a bachelor’s degree or advanced degree.
- Five interstate highways including I-95, I-70, and I-83 connect Baltimore to more than 66% of the U.S. population within an overnight drive.
- CSX Transportation and Norfolk Southern are two of the freight rail operators in Baltimore.
- Port of Baltimore is the closest East Coast port to the Midwest, employs more than 14,000 workers and set a record last year for shipping volume.
- Baltimore-Washington International Thurgood Marshall Airport (BWI) is just 9 miles south of Downtown Baltimore and serves more than 27 million passengers annually.
Real Estate Market
People are willing to pay more for a home in Baltimore with perks like spacious backyards and comfortable work-from-home locales. As Business Insider reports, buyers in Baltimore are desperate because “homes are flying off the market so quickly.” In fact, one real estate agent notes that all of the agent lists are being sold within three days.
Key Market Stats:
- Zillow Home Value Index (ZHVI) for a home in Baltimore is $162,197 as of November 2020.
- Homes values in Baltimore have increased by 7.0% year-over-year and are forecast to grow by another 11.2% over the next 12 months.
- Over the past five years home values in Baltimore have increased by more than 20%.
- Median listing price of a single-family home in Baltimore is $265,000 based on the most recent research from Realtor.com (Nov. 2020).
- Median listing price per square foot for a home is $142.
- Days on market (median) is 57.
- Median selling price of a single-family home in Baltimore is $269,900.
- Sales-to-list price ratio is 100%, meaning that approximately every home listed for sale is selling for the asking price.
- Of the 224 neighborhoods in Baltimore, Locust Point is the most expensive with a median home listing price of $385,000.
- Carrollton Ridge is the most affordable neighborhood in Baltimore with a median home listing price of $25,000.
Strong Renters’ Market
About a year ago, Attom Data Solutions ranked Baltimore as the 4th best market for the growth in single-family rental yield. Today, Baltimore is still listed as one of the best places to buy rental property for cash flow and appreciation.
The economy is quickly recovering and the job market is diverse, with steady population growth and relatively affordable housing. Baltimore is also about 40 miles away from Washington D.C. which helps to keep the demand for housing in the Baltimore real estate market strong.
Key Market Stats:
- Average rent in Baltimore is $1,304 per month according to the most recent research by RENTCafé (as of Oct. 2020).
- Rents in Baltimore increased by an average of 2% year-over-year.
- 70% of the housing units in Baltimore rent for over $1,000 per month.
- Renter-occupied households in Baltimore make up 47% of the occupied housing units.
- About 26% of the residents of Baltimore are between the ages of 30 and 49, perfect for rental property investors targeting the millennial renter.
- Neighborhoods in Baltimore most affordable for renters include Brooklyn, Curtis Bay, and Fairfield Area where rents average $875 per month.
- Neighborhoods in Baltimore with the highest rents include Perkins Homes, Upper Fells Point, and Washington Hill where average monthly rents are nearly $2,100.
Historic Price Changes & Housing Affordability
The historic change in home prices and the affordability of housing are two reports real estate investors can analyze to help forecast future potential property appreciation and the likely demand for rental property.
Each month Freddie Mac releases its House Price Index (FMHPI) report with up-to-date data on the change in home prices for all markets across the U.S. The most recent FMHPI report for the Baltimore-Columbia-Towson MSA shows:
- October 2015 HPI: 174.32
- October 2020 HPI: 214.95
- 5-year change in home prices: 23.3%
- One-year change in home prices: 8.7%
- Monthly change in home prices: 1.1%
A housing affordability index – or HAI – report is published by the National Association of Realtors (NAR).
The NAR uses a HAI baseline of 100, then assigns an affordability index number of existing single-family homes for every metropolitan area in the U.S. These index rankings are determined by comparing the median family income needed to purchase a median-priced, existing single-family home using a conventional mortgage with a 20% down payment.
Based on the NAR’s latest report, the HAI for the Baltimore-Columbia-Towson MSA was 179.3 in 2018, the most recent year available. This means that the median family has less than twice the income needed to purchase a median priced, single-family resale home in the Baltimore metro area.
Quality of Life
Baltimore was the only city in Maryland to rank as one of the best places to live in the U.S., according to a report from WJZ in Baltimore. The city’s elegant buildings, warm friendly people, and lively nightlife and music make Baltimore a “pleasant and fun place to call home.”
Key Quality of Life Stats:
- Forbes ranks the Baltimore metro area #30 in education and #87 in the best places for business and careers.
- U.S. News & World Report rates Baltimore as the 117th-best place to live in the U.S. and the 76th-best place to retire.
- Although Baltimore is only 40 miles from Washington, D.C., the cost of living here is just 6% above the national average.
- Niche.com ranks the city as the 77th-best city for young professionals in America and gives Baltimore high ratings for diversity and nightlife.
- Climate in Baltimore is humid subtropical, with long hot summers and mild winters with only sporadic snowfall.
- Baltimore is ranked among the top foodie hotspots thanks to the city’s fresh seafood, Maryland blue crabs, and picturesque waterfront dining spots.
- The Baltimore Museum of Art and the Walters Museum are known around the world for their renowned collections, including the largest holding of works by Henri Matisse.
- Baltimore is home to three state-designated arts and entertainment districts: Station North, Highlandtown, and the Bromo Arts & Entertainment District.
- MLB Baltimore Orioles and NFL Baltimore Ravens are two of the area’s professional sports teams.
- Johns Hopkins Hospital and University of Maryland Medical Center are the two top hospitals in Baltimore.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Baltimore based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
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