Baltimore Real Estate Market: Insights on The market and Predictions for 2022, by Emerick Peace.

Insights on The market and Predictions for 2022

By Emerick Peace

Today, we look at a city that has been making headlines of late and that is the city of Baltimore.

For the better part of last year, the real estate market in Baltimore was thriving (still is) with days on the market reaching an all-time low. According to a recent article by Baltimore Sun, the suburban areas around Baltimore such as Joppa and Laurel are experiencing stiff competition with some homes selling in just under 6 days.

The Covid-19 pandemic made an impact on many sectors of the local economy while also enhancing some. One of the consequences of the pandemic was the boom in the real estate market. Presently, the real estate market in Baltimore is doing well because of the lowinterest rates and but that is poised to change with the recent rise in rates. But, at present, the real estate market is a top performer, however, this is a trend that has been recorded throughout the country. Here are some of the trends that are helping to drive demand in Baltimore.

RENTAL VACANCIES ARE UP

The vacancy rate in Baltimore is currently at 5.6% which is an increase of 0.2% from last year. On a national level, it is noticeable that the vacancy rate is 6.8% which means that while the rate may be high in the city, it is not particularly high or alarming considering the national rate. But, it is alarming enough since, at any moment, the rate could fluctuate, but that most will depend on what happens with the single-family market.

Still, Baltimore presents itself as one of the best renter markets with ATTOM Data Solutions ranking it as the 4th best market for the growth in single-family rental yield. Young singles and couples without children are the main drivers of demand for rental properties in Baltimore.

THE UNEMPLOYMENT RATE IS STILL HIGH

The city’s proximity to the capital has led to years of federal investment. It was particularly hit hard by the pandemic but the good news is that it is recovering. The employment sectors such as construction, manufacturing, trade, transportation, and financial activities seem to be catching up faster according to recent data from BLS.

Because of the pandemic, the unemployment rate in Baltimore peaked at a high of 9% and since then, the rate has dropped to 5.8% as of February 2021. It has since declined to 4.9% (Q4, 2021) according to data from BLS.

It is likely that as the city continues to recover and businesses continue to reopen, the rate of unemployment will drop, more so as the restaurant and hospitality industry recovers.

STATE OF THE REAL ESTATE MARKET IN BALTIMORE

Just to summarize; There were 1,052 housing units in Baltimore that went under contract as of December 2021 versus 1,148 housing units around the same period in 2019.

In January this year, the total number of homes sold was lower representing an 8.4% decrease over the month of December 2020. In addition, the median sale price was $297,250 which is up 8.5% or $23,300 more from the previous year. Looking at this data, it means that sellers are reactionary to the changes in demand where they are increasing the home prices to counter the demand. Furthermore, the median sale price for Baltimore City was $200,000, an increase of 2.2% or $4,300 more as compared to last year.

About 943 homes were sold in Baltimore city in December versus 958 sold around the same time a year ago representing a 1.6% drop in sales. The median days on market were 9 in Baltimore County and 17 in Baltimore City.

WHAT ARE THE PREDICTED TRENDS FOR 2022?

Baltimore was a seller’s market in January 2022 and it is likely that the trend will continue before cooling down. Data from Realtor.com show that in January, the median list price of homes in the County was $299,900 trending up 7.1 years over year. If this trend sustains, the market may be hot and the homes will be selling really fast. This puts sellers at a great advantage.

The sale to list price ratio in Baltimore currently stands at 100%. Ideally, buyers prefer a sale to ask price ratio that’s closer to 90%. Many sellers in Baltimore have managed to hold good leverage in these negotiations in the past month and data supports the fact that many have been selling their homes for 100% of the asking price.