Despite the global health crisis, the Baltimore real estate market is thriving. One of the primary reasons for this is that the unemployment rate has decreased significantly since the peak of the pandemic in 2020. The increase in the employment rate has subsequently caused the demand for housing to soar. As a result, the days on market have remarkably declined as more and more working people are looking for a home to stay.
About Baltimore
Most of Baltimore’s population is composed of people who are young, single, educated, and dynamic career starters—usually in their 20s to 30s who have college degrees and are starting their careers in professional occupations. Baltimore is one of the top desirable cities in the United States for young, educated, and single professionals because of new employers, investments, and job opportunities.
Baltimore is also a great place for tourists. In fact, Baltimore is considered as one of the older and more historic cities because of its large stock of pre-World War II architecture. It is also a coastal city, which means that it is near bodies of water (such as the ocean, inlets, and bays) where visitors and locals would love to go for sightseeing and recreation.
Baltimore Real Estate Market Overview
Will it be profitable to invest in Baltimore real estate in 2022?
In general, you will find a lot of income opportunities if you own a Baltimore rental property. Based on the demographics of Baltimore’s population, investing in the Baltimore City residential real estate market is an excellent way to earn a passive income. Since most of the population is made up of young professionals who don’t own a house yet, there is a high demand for monthly or long-term rental properties.
Additionally, Baltimore has diverse tourist attractions like the pre-World War II architecture and Baltimore’s Inner Harbor area which offers shops, upscale crab shacks, the Civil War-era warship, the USS Constellation, and the National Aquarium—all of which are places where tourists from other states and countries would love to visit. This only means that Baltimore also offers a good investment opportunity for short-term or vacation rentals.
Based on the current Baltimore real estate market trends, investing in the Baltimore real estate market can be valuable due to a steady real estate appreciation rate. NeighborhoodScout’s data show that Baltimore’s most recent annual appreciation rate is 10.85%, which is higher than half of the other cities and towns in Maryland.
Drivers of the Baltimore, Maryland Real Estate Market 2022
Baltimore has a rich history—it was one of the largest cities in the U.S. during the colonial era. Today, Baltimore is home to around 575,584 people. However, despite the nearly 5% population decline from 2000 to 2010, Baltimore is still considered a good place for real estate investment that provides a significant opportunity for investors.
While the global pandemic had an inevitable adverse impact on many sectors of the local economy, it has somehow enhanced the real estate market in Baltimore. But what are the reasons why the Baltimore real estate market is booming?
Here are some of the drivers of the Baltimore, Maryland real estate market:
1. Low-interest Rates
One of the primary reasons why the Baltimore real estate market is going strong is the historically low-interest rates. The low-interest rates—which have not only occurred in Baltimore City but all throughout the country—will continue to drive up the demand for Baltimore investment properties.
2. Demand for Spaces That Are Good for the New Normal
Another driving factor of the real estate market in Baltimore is the demand for spaces that are considered conducive to the new normal. Young people may be looking for a space with a home gym, home office, and a green space for outdoor activities. Families may be looking for homes that can accommodate virtual or homeschooling, as well as a private office for a work-from-home setup.
3. A huge Student Market
Baltimore provides a good opportunity for real estate investors who want to target the student market. Baltimore is home to tens of thousands of university students, including those who are enrolled in the University of Maryland, John Hopkins University, Coppin State University, Morgan State University, The University of Baltimore, Towson University, and more. The Baltimore real estate market for students extends past the neighborhood’s big schools like Notre Dame of Maryland and Loyola.
4. Large Population of Working-class Renters
One of the most significant drivers of the Baltimore real estate market is the decline in the unemployment rate, which resulted in an increase in working-class renters. According to the U.S. Bureau of Labor and Statistics, the unemployment rate of the Baltimore-Towson, MD area as of October 2021 dropped to 4.9% from 6.4% last June 2021. These numbers are expected to improve as more Americans get vaccinated and Baltimore continues to lift restrictions.
The improvement in unemployment will continue to increase the demand for housing, which is one of the reasons why it’s currently prudent to invest in Baltimore income properties. Many of these working-class renters cannot afford to buy homes yet, so they’re guaranteed to rent for the long term. With the relatively low cost of properties in Baltimore, a traditional Baltimore income property will see a good return on investment.
5. Several Job Opportunities
Several job opportunities from Amazon’s fulfillment centers in Baltimore is another driver of the Baltimore real estate market. Because of these thousands of job opportunities from Amazon centers, there is an increased demand for Baltimore rental properties in the area as people move where there is work and current employees will want to live closer to their working place.
6. Limited Housing Inventory
The real estate market in Baltimore cannot meet the continuously increasing demand for housing properties. In fact, Baltimore has a low inventory of single-family homes relative to the current demand. The sales volume was up by approximately 14% year over year, however, the number of active listings remains tight. This means that inventories are declining amidst the faster turnaround. There are only around 1,382 for-sale listings in Baltimore City as of November 2021, and as the demand will continue to rise, this number will soon go down.
7. Thriving Industries
Amidst the pandemic, a number of Baltimore industries not only survive but thrive. The port sector, for instance, is doing well in Baltimore. The Port of Maryland generates billions of dollars in revenue and also is responsible for more than 13,000 direct jobs. Baltimore continues to be a leader in the biopharma and life sciences industries—a home to Johns Hopkins Hospital and the Centers for Medicare and Medicaid Services.
Another industry that is doing well despite the pandemic is the textiles and sports equipment industry—the headquarters of Under Armour (which generated an estimated $4.5 billion in revenue in 2020) is located in Baltimore. The retail and e-commerce industry is also growing. Amazon is headquartered in Baltimore and it has also established a number of warehouses in and around the city.
8. Tourist Attractions
Baltimore is a colorful and diverse city, known for its beautiful harbor, quirky and distinct neighborhoods, unique museums, and rich history. Baltimore is also the birthplace of the United States National anthem and The Star-Spangled Banner House which sits majestically at the mouth of Baltimore’s Inner Harbor.
All of these attract tourists, which makes a good opportunity for Baltimore Airbnb property owners and vacation property investors. And because Baltimore stands out for its walkability and public transportation network, an Airbnb Baltimore property that’s close to public transit command a premium.
2022 Baltimore Real Estate Market Statistics
The current Baltimore real estate market is growing amidst the COVID-19 pandemic, which is partly because of the historically low-interest rates. Also, as employment rates continue to improve, there is an ongoing rising demand for residential properties.
You can take advantage of this demand by either investing in Baltimore rental properties or selling your home to potential buyers. Currently, the Baltimore City residential real estate market offers affordable investment opportunities with a high potential for return on investment.
Mashvisor gathered the Baltimore Real Estate Market Statistics as of November 16, 2021, which includes the median price for housing properties, the number of listings for both for-sale and rental properties, the average rental income for both long-term (traditional) and short-term (Airbnb) rental properties, as well as the other important information.
Baltimore City, MD
- Listings for Sale: 1,382
- Median Property Price Baltimore City, Anne Arundel County: $425,849
- Average Price per Square Foot: $238
- Days on Market: 87
- Traditional Rentals Listings: 5,578
- Average Monthly Traditional Rental Income: $1,955
- Traditional Cash on Cash Return: 3.31%
- Price-to-Rent Ratio: 18
- Airbnb Rentals Listings: 791
- Monthly Airbnb Rental Income: $2,967
- Airbnb Cash on Cash Return: 4.52%
- Airbnb Daily Rate: $143
- Airbnb Occupancy Rate: 64.3%
- Walk Score: 60
According to Mashvisor data as of November 16, 2021, there are around 1,382 for-sale listings in Baltimore City, Anne Arundel County, with a median property price of $425,849 and an average price of $238 per square foot. The average number of days for which these properties stay listed on the market is 87 days, which is not bad given that we are still in the middle of the pandemic.
Based on the statistics above, the Baltimore rental market is also robust. There are around 5,578 listings for traditional (long-term) rentals, which generate an average monthly income of $1,955, with a cash on cash return of 3.31%. The price-to-rent ratio of 18 is considered moderate—this means that there is an equal demand for both for-sale and rental properties in the city.
Short-term rentals will also make a good investment. There are around 791 Airbnb listings with an average occupancy rate is 64.3%. the average monthly rental income of $2,967, with an average Airbnb daily rental rate of $143. The Airbnb cash on cash return is 4.52%, which is actually a good number as it indicates that there is a high demand for short-term rentals in the city despite the global health crisis. Baltimore City has a walk score of 60—this means that the area is considered walkable, which can attract both long-term renters and Airbnb guests.
Baltimore Real Estate Market Trends 2022
Let’s take a look at the Baltimore real estate trends that can affect the real estate market in Baltimore:
A Steady Increase in Appreciation Rates
The annual Baltimore real estate appreciation rate is 10.85%. While this rate is lower than the appreciation rates in most communities in America, it is higher than around 50% of the other cities and towns in Maryland. It is expected that the inventories will remain tight for the near future—because of this, the rates may continue to rise at a steady pace until new listings will become available.
Increase in Median Property Price
According to MillionAcres, the median price of for-sale properties is up by approximately 7.9% year over year. In Baltimore, the median housing price is $425,849, which is slightly higher than the national median home price of $404,700. This increase is likely due to the high demand for housing while the supply of houses remains low. The limited inventory relative to the increase in demand will keep home prices growing over the next few years.
Affordable Investment Opportunities
Baltimore City remains an affordable area to invest in. Real estate investors who want to invest in Baltimore real estate market, more specifically in rental properties, can find several affordable investment opportunities in Baltimore. The average price per square foot in Baltimore City is $238, which is lower compared to most other cities in Maryland.
Building Permits for Multifamily Units
The most common housing units in Baltimore are 3- to 4-bedroom row houses. As the demand for multifamily housing and rentals goes up, the Baltimore multifamily real estate market is also booming. However, the number of building permits for multifamily housing units are still low, although this is expected to increase in the next following year.
A “Seller’s Market” is Expected
According to Zillow Home Value Index, the typical home value in Baltimore County has appreciated by around 36% since December 2011. For the past year, Baltimore home values have gone up 12.8%. With the low inventory and a continuous increase in demand for housing, we can expect that the Baltimore real estate market 2022 will be a seller’s market.
An Influx of Demand for Rentals
Currently, around 54.3% of Baltimore’s population are renters. With insufficient inventory levels, more people will be forced to rent. The increase in rental demand is also caused by the increase in job opportunities due to the setting up of Amazon’s fulfillment centers. Plus, most of the working-class population cannot yet afford to buy a home, especially with the steady real estate appreciation rate. In fact, Baltimore’s moderate price to rent ratio of 18 means that we are now seeing a gradual increase in demand for rental properties.
Increase in Rental Rates
Due to the increasing demand for rental properties, a gradual increase in the rental rates in Baltimore is expected. According to MillionAcres, a year-over-year increase in rental rates of 3.2% has been noted. This is favorable to Baltimore rental property owners because, with rental rates on the rise, you may be able to increase your profits at a quicker rate.
Revitalization Projects
Several neighborhoods in Baltimore, particularly in East Baltimore, are targeted for revitalization. The Baltimore real estate market forecast shows that these new infrastructures—including enhanced bus stops, dedicated bus lanes, rail improvements, and road improvements—make the Baltimore real estate even more attractive to investors.
Foreclosure Statistics
According to the midyear 2021 U.S. Foreclosure Market Report by ATTOM Data Solutions, the number of U.S. properties with foreclosure filings is down by 61% from last year and 78% from two years ago. Foreclosures are down on a national level as well as in the Baltimore area. This may be due to the ban on foreclosures that have been implemented until July 1, 2021. However, we can expect a decline in Baltimore foreclosures after the ban is lifted.
Based on these trends, here are what we forecast will happen in the Baltimore real estate market next year:
- Property values will continue to appreciate at a steady pace.
- The working-class homebuyers will have a hard time finding a house that they could afford. Because of this, the demand for long-term rentals will continue to increase.
- We can expect a decrease in foreclosures.
- Airbnb and other vacation rental properties will slowly recover as more people are getting vaccinated and the city is slowly opening to tourists.
Baltimore Rental Market Forecast 2022
The Baltimore real estate market offers investors excellent opportunities to earn significant returns. However, not all investment properties will guarantee profits. The best investment for the 2022 Baltimore real estate market is a rental property that will generate good cash flow. If you generate a good cash flow from your Baltimore investment properties, it means your investment is indeed profitable and you will have sufficient funds on hand to repay your mortgage, cover your operating expenses, and even have extra left for yourself.
Baltimore Traditional Rentals
- The Baltimore traditional rental market has been fluctuating since 2020. There is an all-time low in rental vacancies in January 2020, with an available vacancy rate of 4.7%. However, the vacancy rate shoot up to 9.6% in July 2020 and dropped back down to 5.8% in February 2021. If rates stay steady, Baltimore rental property investors can expect a high occupancy rate, providing them with a stable flow of rental income.
- With the little inventory available, more people will be forced to remain a part of the renter pool. Because of this, the rate for traditional rentals are expected to increase.
- The Baltimore real estate market forecast on traditional/long-term rentals shows that there will be an increased demand for rental properties near where there are job opportunities.
- Because Amazon has set up fulfillment centers in Baltimore, we can expect the Baltimore real estate market to flourish significantly, particularly around the new industrial parks built to cater to Amazon. This is due to an increase in job opportunities from Amazon’s suppliers as well as Amazon itself.
- The student market is also a great target for traditional rentals. You could buy Baltimore rental properties near the big universities the University of Maryland and John Hopkins University. Rental properties around the Maryland Institute College of Art, Goucher College, and Sojourner-Douglass College will also be a good investment.
- One of the best tenants are retirees who intend to relocate to Baltimore. If you target retirees, it’s best to find a place near the public transit or close to most of the necessary amenities.
Baltimore Airbnb Rentals
- As of November 2021, the average Airbnb daily rate is $143. The average Airbnb occupancy rate is 64.3%, with an average monthly rental income of $2,967 and cap rate of 4.52%.
- 61% of the active Airbnb rentals rented the entire home, 37% rented a private room, while 18% rented a shared room.
- 33% of Airbnb renters stay fort a minimum of one night, 21% stay for a minimum of two nights, and the rest stay for three or more nights.
- While there is a drop in the active short-term rentals from the last quarter of 2019 to the end of 2020, this is only due to the lockdowns caused by the pandemic. The Airbnb 2022 real estate market is expected to improve since lockdowns have slowly been lifted and more people are getting vaccinated.
- Tourists are expected to flock since travel restrictions are gradually being lifted. It’s best to invest in an Airbnb property that’s near the public transport or areas near the Baltimore tourist attractions.
- While Airbnb properties are mostly for short-term or vacation renters, 23% of Airbnb tenants rent for 30 days or more. With this, it’s also a good idea to consider investing in a property that does not need too much maintenance. The running costs for owning and managing a Baltimore Airbnb property should not be too high so you can maintain a good cash flow from your rental income.
Airbnb Baltimore Rules and Regulations
Airbnb provides a more profitable rental strategy in the Baltimore real estate market. Airbnb rentals have better monthly average rental income, cap rate, and occupancy rate compared to traditional rentals. If you plan to invest in short-term or vacation rentals, it’s important to know the most recent Airbnb rules and regulations in the city.
Registration Requirements
In Baltimore city, real estate investors who host short-term stays (i.e. less than 90 consecutive nights) should register their short-term rental with the city—whether this is a rental of the entire house or just a portion of your property. In order toget a license to rent your property as a short-term rental, it must be your permanent residence and the property must be free of any code violations.
You can register through Baltimore City’s website. You will need to provide your personal information, including your name, home address, phone number, email address, emergency contact, and State Comptroller Sales and Use Tax Number. You will also need to pay a licensing fee of $200.00 per dwelling unit. Baltimore City allows you to register a maximum of short-term rental unit—one hosted unit and one unhosted unit.
To apply for a license, you need to meet the following requirements:
- Property must be the permanent residence of the applicant
- Property must be in permanent residence’s name
- Property must be free of any code violations
After the city processes your application, you will receive your short-term rental license number, which you’ll add to your Airbnb listing or in any form of advertisement. The license expires after two years from its issuance. You may apply for renewal after it expires.
If one or more of your properties are not eligible as a short-term rental, you can switch to long-term stays. A few listing types are exempt from registering as short-term rentals—if this is the case, you won’t need to register your property, but you will still need to claim an exemption through Airbnb to keep hosting.
Operational Requirements
The short-term rental property must be maintained in compliance with the City Building, Fire, and Related Codes Article, the City Health Article, and the Zoning Code of Baltimore City. As a host, you are required to keep a record of rentals with all the necessary information, maintain that record, and make it available for inspection by the Housing Commissioner.
You are required to display your or your representative’s emergency contact information, which must be readily accessible to the guests during the entire rental term. You or your representative must reside within 15 miles of the rental property and should be accessible for the entire term of the rental. You should also post your notice of licensure for your short-term rental property.
Baltimore City Bill 18-0189
The primary Baltimore City laws governing short-term rentals and sort-term rental platforms are found in Baltimore City Bill 18-0189, which was signed into law on January 28, 2019.
Here are the things that short-term real estate investors in Baltimore need to remember:
- You can only list your primary residence for short-term rentals. However, if you meet specific criteria and already own and operated a short-term rental unit before December 31, 2018, that unit can be grandfathered.
- Each dwelling unit must be licensed by the City of Baltimore and hosts need to pay $200 to renew each rental unit bi-annually. The license grants the City the ability to issue fines up to $500 for violations and suspend or revoke licenses.
- Short-term rental owners must follow city laws to operate. The Baltimore rental property must comply with all city building and fire codes. The rental property owners must monitor and record rentals and they must be registered with the state to collect state sales tax. License numbers must be displayed in all listings and platforms advertising the rental.
- Airbnb and other short-term platforms cannot collect fees for any rooms that are booked with unlicensed hosts. They also need to collect and remit any applicable hotel taxes
Best Neighborhoods for Traditional Baltimore Rental Properties
The best Baltimore neighborhoods for traditional rental properties include those that are safe and family-friendly, have a high demand for long-term rentals, close to places where there are job opportunities, close to public transits, and are considered walkable. To find the best neighborhoods for traditional rentals, we consider the average monthly rental income, the traditional cap rate, and the price to rent ratio of a neighborhood.
Inner Harbor
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- Traditional listings: 31
- Traditional Rental Income: $4,916
- Traditional Cap Rate: 3.34%
- Price to Rent Ratio: 17
Inner Harbor is a sightseeing hub, home to Maryland Science Center and the National Aquarium. According to our neighborhood analysis based on the average monthly rental income, Inner Harbor is the most profitable Baltimore neighborhood for traditional rental investment properties.
Jonestown
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- Traditional listings: 19
- Traditional Rental Income: $1,533
- Traditional Cap Rate: 5.42%
- Price to Rent Ratio: 10
Jonestown is commuter-friendly, walkable, and considered historic. It contains numerous landmarks, including the 1828 brick Phoenix Shot Tower and the 1793 Star Spangled Banner Flag House museum. Jonestown offers centrally located rowhomes convenient to both Downtown and the Johns Hopkins Hospital East Baltimore campus.
Oliver
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- Traditional listings: 3
- Traditional Rental Income: $1,240
- Traditional Cap Rate: 5.22%
- Price to Rent Ratio: 13
Oliver has a population of over a population of 6,000. Oliver offers a mix of urban and suburban feel and most residents rent their homes, which means there is a good opportunity for traditional rentals here.
Little Italy
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- Traditional listings: 34
- Traditional Rental Income: $2,333
- Traditional Cap Rate: 1.29%
- Price to Rent Ratio: 39
Little Italy is a neighborhood known for its strong Italian-American heritage and identity, which is still mostly populated by the descendants of Italian-American immigrants. It is home to Saint Leo the Great Italian parish and some of the best restaurants in the city.
Upper Fells Point
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- Traditional listings: 57
- Traditional Rental Income: $1,833
- Traditional Cap Rate: 3.4%
- Price to Rent Ratio: 17
Upper Fells Point, also known as Fells Prospect, is a neighborhood of rowhomes and multi-family units with diverse community. Upper Fells Point has attracted many young professionals and young families. It is home to several ethnic restaurants, shops and other neighborhood hangouts.
Best Baltimore Neighborhoods for Airbnb Investment Properties
The best Baltimore neighborhoods for Airbnb investment properties are those that are close to tourist attractions, near the public transits, and are considered walkable. For the best neighborhoods for Airbnb rentals, we consider the average monthly rental income, the Airbnb cap rate, and the occupancy rate.
Greenmount West
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- Airbnb listings: 238
- Airbnb Rental Income: $4,342
- Airbnb Daily Rate: $131
- Airbnb Cap Rate: 7.91%
- Airbnb Occupancy Rate: 61.48%
Greenmount West is a neighborhood in the state-designated Station North Arts and Entertainment District. This Baltimore neighborhood is home to gallery exhibits, music venues, and the best restuarants—these are some of the reasons why tourists would want to visit here.
Washington Hill
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- Airbnb listings: 224
- Airbnb Rental Income: $4,048
- Airbnb Daily Rate: $124
- Airbnb Cap Rate: 7.24%
- Airbnb Occupancy Rate: 73.1%
Washington Hill is a culturally, racially and economically diverse neighborhood in Downtown Baltimore. It is close to pools and recreation centers and is considered as a historic neighborhood. It is also close to public transits and is generally walkable, with a walk score of 93.
Seton Hill
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- Airbnb listings: 213
- Airbnb Rental Income: $2,484
- Airbnb Daily Rate: $117
- Airbnb Cap Rate: 8.31%
- Airbnb Occupancy Rate: 69.06%
Seton Hill is a historic district in Baltimore. It is home to St. Mary’s Seminary Chapel, which is a National Historic Landmark. It provides easy access to light rail and metro subway. The neighborhood is generally considered artsy, historic, walkable, and community-friendly.
Mount Vernon
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- Airbnb listings: 241
- Airbnb Rental Income: $2,063
- Airbnb Daily Rate: $118
- Airbnb Cap Rate: 4.90%
- Airbnb Occupancy Rate: 70.69%
Mount Vernon is one of the city’s oldest neighborhoods. It is designated as a National Historic Landmark District and a city Cultural District—it offers some of the best conveniences of urban living. This neighborhood is close to cultural amenities, dining, nightlife, and shopping. It attracts residents and tourists that enjoy arts and entertainment.
Gay Street
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- Airbnb listings: 215
- Airbnb Rental Income: $2,678
- Airbnb Daily Rate: $116
- Airbnb Cap Rate: 6.59%
- Airbnb Occupancy Rate: 73.54%
Gay Street is a notable example of a late 19th and early 20th century commercial corridor in a developing urban area. This neighborhood is unique in its high concentration of small-scale commercial buildings.
How to Find the Best Baltimore Investment Properties in 2022
1. Understand the Market Analysis
When it comes to finding the best Baltimore investment properties, it’s important to do your research and understand the Baltimore real estate market analysis. Know the market share, demand for rentals, and your possible competition. This information is necessary if you want to ensure that you’re investing in a property that can help you maximize your income potential.
2. Review the Locations Thoroughly
Location is one of the most important factors that you should consider when choosing an investment property. The Baltimore neighborhood that you choose must be safe to live in and should have a low crime rate. It should be close to basic amenities, public services, public transport, schools, and shopping malls.
3. Decide Which Type of Investment Properties You Want
To maximize your income potential, you don’t necessarily need to find a cheap neighborhood to invest in. Cheap neighborhoods are not necessarily the best places to live in. When deciding what type of investment properties you plan to buy, it’s essential to consider the potential opportunities. For example, if you think there are more opportunities in Baltimore multifamily real estate market, then you might consider investing in a multifamily unit.
4. Use Online Platforms Like Mashvisor to Find the Best Investment Properties in Baltimore
There are online platforms that can help you find the perfect investment properties that match your budget, needs, and personal preferences. If you feel like you’re ready to invest in the Baltimore real estate market, Mashvisor can help you find a profitable investment property that suits your unique investment taste.
Invest in the Baltimore Real Estate Market With the Help of Mashvisor
Our Mashvisor database contains hundreds of thousands of properties. We provide complete market research and analysis with just a few clicks away so you won’t have to leave your home or call up an agent.
You can easily search for the perfect investment property by typing in a city or your preferred neighborhood to get a quick overview of the houses for sale in that area. Then click on the property that interests you to find a more detailed analysis of the average rental income, cash on cash return, median home price, cash flow, occupancy rate, and more. Our database also provides property valuation analytics, comparable rental listings, and insights, and it can help you determine which rental strategy would work best in that area.
Begin your real estate investing journey with Mashvisor tools—we will help you analyze the market and check comparable insights. Click here to start searching for the best investment properties in your chosen city and neighborhood.