IRR-Baltimore Mid-Year Viewpoint 2015 Local Market Report - Multifamily
The Baltimore apartment market has continued to exhibit strong fundamentals, as regional and national investors are getting priced out of Washington, DC and Philadelphia and expanding “outside the box” to third-tier MSAs like Baltimore. However, following five consecutive years of decreasing vacancy and increasing rents, the first half of 2015 exhibited signs the market is leveling off. This was contributed, in part, by a slow leasing season due to a relatively harsh winter.
Despite an overall stabilizing of the market, the surge in new construction and conversions in Downtown Baltimore and the Inner Harbor submarkets continues. The Downtown Partnership of Baltimore reports that, as of the first quarter 2015, 1,460 apartments were under construction and over 3,096 units were in planning; 4,700 housing units “will hit the Downtown Baltimore market over the course of the next several years.” We note a growing trend of millennials preferring to live in the city, some taking public transit or Uber to work locally while others are commuting to employment in suburban locations.
Overall, market conditions are stabilizing in the Baltimore area. In the long-term, however, Baltimore will continue to benefit from being the headquarters of several major employers (Johns Hopkins, Social Security Administration, NSA, and Under Armour) in a variety of industries, as well as being only an hour away from Washington, DC. The education and medical industries are among Baltimore's strongest employment sectors, drawing demand from graduate students and young professionals, the strongest-growing renter demographic in Baltimore. A February 2015 article in The Christian Science Monitor noted Baltimore ranked 4th in the nation (behind Los Angeles, Miami, and St. Louis) for percentage growth in the number of 25- to 34-year-olds with at least a four-year degree, according to data from City Observatory.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.