The condominium market in Baltimore?s central business district is exploding, with hundreds of units either on the market, under construction or in the planning stage.
It?s a double-edged sword, however, bringing in more affluent residents while pushing middle and lower income residents out to the fringes.
John Hopkins, associate director of applied economics at RESI, the economic consulting organization at Towson University, said high-end condos are in demand by “empty-nesters and professional couples who want the urban atmosphere without the hassles of a yard and daily upkeep.”
The trend is driving redevelopment efforts throughout the area, as evidenced by an announcement last week that the last undeveloped parcel along the Inner Harbor, 300 E. Pratt St., will be transformed into a 52-story mixed-use development, featuring 300 condos, a five-star hotel, restaurant and shopping complex by Baltimore-based Doracon LLC and New York-based UrbanAmerica LP, a private equity firm.
According to multiple-listing-services resale data compiled by Metropolitan Regional Information Systems Inc., 244 condos were offered for sale in January 2006 in Baltimore?s downtown district. Prices ranged from less than $100,000 to $5 million, with the largest offering ? 29 ? in the $250,000-$299,000 price range. Twenty-eight condos were sold during that period.
In June 2006, the latest month for which data is available, the total number of condos offered for sale in the less than $100,000 to $5 million range stood at 348, with 41 units available in the $250,000-$299,999 range, according to the data. Seventy-eight condos sold in June.
“The impact on existing housing is positive because it?s bringing prices up,” Hopkins said. “As the condos attract a vibrant population back into downtown, it acts as an attractor for like people.”
But there is a downside.
“What at one time was affordable is rehabbed into high-end housing or is being demolished and redeveloped into high-end property. There needs tobe an incentive to develop affordable and work-force housing,” Hopkins said.
Middle-income people are beginning to look in neighborhoods just outside the city, or straddling the city-county border, said Realtor Bernadette May of EXIT Spivey Professional Realty.
“A lot of first-time buyers who are not able to buy a $200,000 or $300,000 home are going into areas where the development is going to occur,” May said. “Redevelopment may even be in the process now, but my clients are still able to find decent housing.”
Hopkins said that neighborhoods outside of the central business district are ripe for middle-income development.
“It?s a risk for people because housing is often their primary investment,” he said. “They can buy at a lower price, but they are betting the neighborhood will slowly improve around them. It?s an encroachment on a way of life ? forcing out the negative factors ? that leads to an area slowly redeveloping. Pending a good economy, everybody benefits.”
