October 2019

Metro Baltimore’s housing market shows signs of weakening with moderate job growth, flat sales, declining permits, and rising inventory levels. Single-family (SF) permits activity slowed 11% for last 12 months compared to the same period last year. Multifamily (MF) permits slowed 9% during that same period. Baltimore’s housing affordability improved due to low mortgage rates and low home value appreciation.

Job Growth

Moderate: August’s job growth was a moderate 0.9% annual pace, or 13K jobs, compared to 1.1% annual growth, or 16K new jobs in July. 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 4,822 compared to 5,347 for the calendar year 2018.  MF permits activity, which is more volatile than SF activity, fell off 9% to reach 2,886 units.

Employment-to-Permit (E/P) Ratio

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

Housing Inventory

Weak (low): We see a seasonal monthly increase for the month-supply of listings to 2.1 months and below the 2.5-month level recorded the same month in 2018. Fewer active listings caused the decline as sales remained flat 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 flat YOY, due in part to the low inventory levels that keeps potential buyers from moving. Median sales prices have increased from $247K average in 2018 to $250K average for the past 12 months.  Low mortgage interest rates helped increase sales for higher priced homes.

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.