Baltimore Multifamily Market Report
Leasing Surge Slices Availability to Record Low;
Trio of Submarkets Account for Development Activity
Renewed demand for urban units elevates fundamentals. Positive absorption is widespread throughout the market, with all 15 of Baltimore’s submarkets recording vacancy compression over the past 12 months ending March. As a result, metrowide vacancy contracted to the lowest rate in over 20 years, while rent growth surpassed the double-digit mark on an annual basis for the first time on record. The easing of pandemic-related restrictions on entertainment and dining venues, coupled with office returns for some employers, spearheaded renter demand in Downtown Baltimore. Over the past four quarters, vacancy in the urban core compressed 380 basis points to 3.4 percent. Entering the second quarter, availability in the CBD was only 50 basis points above the suburban rate, compared to the 370 basis point difference observed at the end of 2020. Class A demand warrants additional projects. Despite net absorption surpassing the 4,000-unit mark in three of the past four years, development in Baltimore is below the metro’s 10-year trailing average. Projects slated for 2022 completion are concentrated in Downtown Baltimore, Baltimore City East and Owings Mills-Pikesville-Randallstown. The roughly 2,000 units delivered across these locales should be well received, as Class A vacancy was historically low at the onset of this year. Tight conditions and a lack of supply additions elsewhere may spark project proposals in additional submarkets moving forward.