It has taken more than five years, but Baltimore appears primed to make a push towards recovery. The health of the Baltimore real estate market has seen dramatic improvements. Whether you’re a seller who sat out the downturn to recoup your investment, or a potential buyer waiting for the right mix of reasonable prices and low interest rates, the time is now. In fact, prices are rising so steadily in the most popular neighborhoods that the pendulum may already be swinging back to a sellers’ market not seen since 2006. Zillow has already projected a 1.2% increase in home prices over the next year.
Appreciation rates have served to drive up home values across the country. Many markets have seen prices rise to pre-recession levels. However, Baltimore has actually experienced a 2.7% decrease in home values over the last year. That is quite surprising, considering the rest of the country has increased by an average of 4.6% during the same period. Despite Baltimore falling behind the national average rate of appreciation, homes in this market are currently worth about $255,600. Subsequently, the national average is $212,267. Gains that have been made in the last three years have served to pull the local market out of the post-recession price weakness. Experts expect prices to increase at a faster rate than in the previous three years. According to the latest CoreLogic Case-Shiller report, Baltimore has been included in the top 10 major markets expected to see the biggest increases in home prices over the course of a year. As a result, Baltimore rents have increased on a level equal to that of cities like San Diego, San Francisco and New York. In each of these cities, renters are allocating more than the suggested 30% of income to rent.
Expected improvements in the housing sector are due, in large part, to a strengthening labor force. In addition to an expanding U.S. economy, Baltimore’s work force continues to serve as a strong driver for local supply and demand. Unlike other cities, employment in the Baltimore market has held up and is on an upward trend. Despite an unemployment rate of 6.5% (just 0.4% higher than the national average), Baltimore’s situation has improved tremendously relative to the same time last year. Subsequently, the unemployment rate one year ago was 7.4%. In other words, local job growth is stronger than that of other markets.
Recent data suggests that the number of homes sold in the Baltimore area has trended downward. As recently as August, 639 units were sold, but September saw that number drop to 574. For those keeping track, that is a 10% decrease. However, September’s numbers remain 18% higher than they were a year ago – more than encouraging, to say the least. Perhaps even more importantly, the amount of active inventory is trending upwards. Over the course of a year, inventory increased 4%, or by 139 units. The jump increased inventory levels to 3,790. At these numbers, the Baltimore housing market has approximately 6.6 months of supply.
This month there were 1,143 homes newly listed for sale in Baltimore City compared to 993 in September 2013, an increase of 15%. There were 655 current contracts pending sale this September compared to 491 a year ago. The number of current contracts is 33% higher than last September. The average number of days on market was 70, higher than the average last year, which was 60, an increase of 17%.
The percent of delinquent mortgages in Baltimore is 11.3%, which is higher than the national value of 6.9%. The percent of Baltimore homeowners underwater on their mortgage is 31.4%, which is higher than Baltimore Metro at 21.7%.
According to Trulia, popular neighborhoods in Baltimore include Canton and Frankford, with average listing prices of $349,917 and $111,809.
Baltimore Housing Market Summary: