Nicknamed the “City of Neighborhoods," Baltimore is home to literally hundreds of different districts providing plenty of options for real estate investors.
Gentrifying neighborhoods near the waterfront boast rents of $2,000 per month and more for a studio apartment, while other parts of the city have homes that have been vacant for years. 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 2020.
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 600,000 residents with about 2.9 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 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 64% of the population is between the ages of 20 and 64.
- Median age in Baltimore is 35 years.
Baltimore’s proximity to Washington D.C. has led to years of federal investment. 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 metropolitan area is more than $205 billion, according to the Federal Reserve Bank of St. Louis, and has grown by 32% since 2010.
- Job growth in Baltimore last year was 1.1%.
- Kiplinger expects job growth in the state will be 0.3% this year, with the City of Baltimore seeing the strongest increase in jobs.
- Baltimore area unemployment rate is 2.9%, decreasing from 3.5% the previous year.
- Average annual salary in Baltimore is $56,400 vs. $50,620 U.S. average, according to U.S. News & World Report.
- 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% of the Baltimore County residents have a high school diploma or higher, and 38% 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
Dwindling inventory has helped push home prices in the Baltimore area to a record high, according to the Baltimore Business Journal.
The National Association of Realtors echoes the Journal’s report, noting that housing inventory is hitting multi-year lows while prices begin to rise again. Metropolitan Baltimore was listed among the metro areas seeing the largest declines in housing inventory, with active listings year-over-year declining by nearly 20%.
Key Market Stats:
- The median listing price of a house in Baltimore is $154,900 while the median selling price is $107,100 according to Zillow (as of January 2020).
- Square foot listing price in Baltimore is $134 vs. $184 per square foot in the Baltimore-Columbia-Towson metropolitan area.
- Home values in Baltimore increased by 1.6% last year and by more than 29% since September 2012 based on the Zillow Home Value Index.
- Average days on market is 111.
- During the listing period 18.4% of the houses for sale in Baltimore have a reduction to the listing price
- 26.5% of the homes in Baltimore have a negative equity vs. 8.2% nationally.
- 2.8% of the homes in Baltimore have a delinquent mortgage vs. 1.1% U.S. average.
- Neighborhoods in Baltimore with the highest home values include Downtown Baltimore and Mid-Town Belvedere.
- East Baltimore Midway is the neighborhood in Baltimore with the lowest home value.
Strong Renters’ Market
A recent article in Realtor.com describes Baltimore as two radically different cities. In some parts of town there are long-abandoned homes desperately in need of repair. In other Baltimore neighborhoods – such as Harbor East and Inner Harbor – rents in luxurious high-rise condos and apartments with water views can rent from $2,000 per month for a small studio up to $5,000 or more per month for a penthouse.
Key Market Stats:
- Median rent in Baltimore is $1,321 per month vs. $1,803 per month for the metropolitan area.
- Rents in Baltimore increased by an average of 1% over the past year, according to RENTCafé.
- 44% of the housing units in Baltimore rent for between $1,001 and $1,500 per month, while 35% rent for $1,000 per month or less.
- 47% of the households in Baltimore are renter-occupied.
- Neighborhoods in Baltimore with the lowest rents include Brooklyn, Curtis Bay, and Fairfield Area where rents average $823 per month.
- Neighborhoods in Baltimore with the highest rents include Perkins Homes, Upper Fells Point, and Washington Hill where average monthly rents are $2,059.
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 quarter the FHA releases up-to-date data on the change in home prices for all markets across the U.S. The most recent FHA 2019 Q3 House Price Index report for the Baltimore-Columbia-Towson MSA shows:
- Since Q1 1991 homes prices have increased by 163.11%
- Over the past five years home prices have increased in Baltimore by 16.78%
- Over the past year prices have increased by 2.98%
- Over the last quarter home prices in Baltimore have increased by 1.23%
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 recent 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 100th-best place to live in the U.S. and the 72nd-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 84th-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