December 2019

Metro Baltimore’s housing market shows signs of weakness at higher price ranges. Increasing sales volume and a declining median sales price suggest sales of lower priced homes is much greater than sales of higher priced homes. Slowing SF permits suggests less new home demand (which are usually at higher price points) or supply-constrained markets. Baltimore’s housing affordability improved due to low mortgage rates and low home value appreciation.

Job Growth

Strong: Baltimore’s November employment grew 1.6%, or 23.6K jobs, compared to November 2018, continuing a three-month run of 1.6% month-over-year growth.  On an average annual basis, the average job growth over the last 12 months ending November 2019 is 1.2% above same period, previous year.  For your investment, it’s important to understand the type and location of job growth. Baltimore enjoys a diversified employment base and employment growth will occur in specific submarkets and sectors.

Permit Growth

Weak: SF permit activity fell 11% YOY to reach 4,866 compared to 5,347 for the calendar year 2018.  SF activity declined in the core counties – Anne Arundel, Howard, and Baltimore County while SF activity rose in the smaller markets of Queen Anne’s, Baltimore City and Harford counties.  MF permits activity, which is more volatile than SF activity, declined -22% from 2018 levels to reach 2,587 units.

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Employment-to-Permit (E/P) Ratio

Strong: Rising E/P ratio due to slowing permit volume and strong job growth. E/P ratio over 1.0 suggests that demand conditions are stronger than supply conditions and is generally a less risky environment.

Housing Inventory

Weak (low): Month-supply of listings remains at 1.9 months and below the 2.6-month level recorded the same month in 2018. Fewer active listings caused the decline as sales remained rose 1,281 units YOY. You will want to understand inventory for your specific submarkets and price band when evaluating your real estate opportunity.

Existing Home Sales and Prices

Moderate: Existing home sales (preliminary) are up 2.6% YOY, due in part to the very slow period in late 2018. Median sales prices have dropped slightly from $247K average in 2018 to $245K average for the past 12 months.

Home Affordability

Strong: After seeing declining home values in 2014-2015, Metro Baltimore values have increased for 16 quarters. Appreciation peaked at 7.1% annual increase for 1Q 2018 and has slowed to 3.9% annual increase for 2Q 2019.  Baltimore’s trends following a similar national slowdown.