Baltimore Multifamily Market Report Q1 2024

Download the Market Report Q1 2024 (PDF)

Market Report Q1 Baltimore

01 Overview

3,850 12 Mo Delivered Units 2,568 12 Mo Absorption Units 7.3% Vacancy Rate 1.3% 12 Mo Asking Rent Growth Baltimore Q1 Market Report | 3 Marking a significant turnaround from a period of extended vacancy expansion. The resurgence in demand throughout 2023, with approximately 1,300 units absorbed, signals a positive shift in market dynamics. While this figure falls below the region’s long-term average demand, it represents a promising trajectory towards market recovery. Developers have remained active, introducing over 3,000 units in 2023 alone, showcasing continued confidence in Baltimore’s housing market. Looking ahead, with approximately 4,000

units currently in progress, the multifamily sector is poised for sustained growth, underscoring the city’s resilience and appeal as a real estate investment destination.

Baltimore’s multifamily market has undergone a notable phase of stabilization in recent quarters

02 Vacancy & Rent

Asking rents have declined in two out of the past four quarters, with four-quarter trailing rent growth hovering around 1.3%.

This slowdown can be attributed to factors such as elevated vacancy levels and shifting market dynamics. However, with only 2,400 units slated for completion by the end of 2024, there is optimism for a rebound in rent growth, particularly in suburban submarkets that have shown signs of improved demand. As the market continues to recalibrate, property managers are exploring innovative strategies to maintain occupancy levels while navigating evolving rent dynamics.

Despite improvements in vacancy rates, the multifamily sector has experienced a moderation in rent growth in recent quarters Baltimore Q1 Market Report | 6 Vacancy & Rent

Vacancy Baltimore Q1 Market Report | 7 Vacancy & Rent 2,000 1,500 1,000 500 -500 -1,000 -1,500 9% 8% 7% 6% 5%} 4% 3% 2% 8% 7% 6% 5% 4% 3% 2% 14% 12% 10% 8% 6% 4% 2% 0% 14% 12% 10% 8% 6% 4% 2% 0% © 2024 CoStar Group - Licensed to Midfield Properties

Rent Baltimore Q1 Market Report | 8 Vacancy & Rent $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 16% 14% 12% 10% 8% 6% 4% 2% 0% $1.85 $1.80 $1.75 $1.70 $1.65 $1.60 $1.55 $1.50 $1.45 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 © 2024 CoStar Group - Licensed to Midfield Properties

03 Construction & Sale

Approximately 4,000 units are currently underway, with significant focus on city-based waterfront areas such as Canton, Downtown Baltimore, and Federal Hill. These developments reflect ongoing investor confidence in Baltimore’s real estate market and underscore the city’s appeal as a prime location for multifamily investment.

Despite a slowdown in investment activity attributed to rising interest rates, notable transactions such as the sale of Concord Park at Russett highlight continued interest in the market. Efforts to preserve affordable housing further diversify the market landscape, ensuring inclusivity and sustainability in Baltimore’s housing market.

The construction landscape in Baltimore remains active, albeit tempered compared to historical norms Baltimore Q1 Market Report | 11 Construction & Sale

Under Construction Properties Baltimore Q1 Market Report | 13 Construction & Sale Properties 3,959 Units 1.9% Percent of Inventory 198 Avg. No. Units

Sales Volume & Market Sale Price Per Unit Baltimore Q1 Market Report | 15 Construction & Sale $300,000 $280,000 $260,000 $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 © 2024 CoStar Group - Licensed to Midfield Properties

Sale Comparables Baltimore Q1 Market Report | 17 Construction & Sale Sale Comparables $167 Avg. Price/Unit (thous.)

$14.1 Avg. Price (mill.)

04 Economy & Debt Trends

Surpassing pre-pandemic employment levels by about 26,700 jobs at the close of 2023. This steady growth trajectory, albeit uneven across sectors, underscores the city’s economic vitality and adaptability. Challenges such as population declines and corporate relocations pose ongoing considerations for economic stakeholders.

However, initiatives to maintain affordable housing reflect a proactive approach to addressing community needs and fostering sustainable growth. Despite headwinds posed by rising interest rates, the multifamily market remains dynamic, with opportunities for prudent investment and continued market expansion.

Baltimore’s economy has demonstrated resilience Moreover, prevailing mortgage rates play a significant role in shaping housing affordability and investment decisions. As of today, estimated mortgage rates for various loan products are as follows: Understanding current mortgage trends is integral to making informed decisions and navigating the multifamily real estate landscape effectively. These rates provide essential context for prospective buyers and investors evaluating their financing options within the Baltimore housing market Baltimore Q1 Market Report | 19 Economy & Debt Trends 30-YEAR VA 6.92%

30-YEAR FHA 6.90% 7.40% 7/6 SOFR ARM 30-YEAR JUMBO 7.62% 15-YEAR FIXED 6.84% 30-YEAR FIXED 7.43%

Economy Baltimore Q1 Market Report | 22 Economy & Debt Trends © 2024 CoStar Group - Licensed to Midfield Properties $110K $100K $90K $80K $70K $60K 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% 10K 8K 6K 4K 2K -2K -4K -6K -8K

Recent Sold Deals Baltimore Q1 Market Report | 27 3602 Monterey Rd Sale Price $3,000,000 Price per Unit $83,333 36 Units 615 N Carrollton Ave 1810 McCulloh St N Calvert Station North Sale Price $900,000 Price per Unit $150,000 6 Units Sale Price $205,000 Price per Unit $34,166 6 Units Sale Price $1,700,000 Price per Unit $94,444 18 Units Sale Price $1,980,000 Price per Unit $165,000 12 Units

YAAKOV KANEVSKY MANAGING DIRECTOR 410-498-5408 YAAKOV@MIDFIELDRE.COM MENDEL DALFIN DIRECTOR 410-916-9256 MENDEL@MIDFIELDRE.COM 3635 Old Court Rd Suite 403 Pikesville, MD 21208 | www.midfieldre.com | info@midfieldre.com | (410)-324-6939

Download the Market Report Q1 2024 (PDF)