Marcus & Millichap

Baltimore Multifamily Market Report

Third Quarter 2018

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Substantial Supply Additions Not Weighing on Property Performance

Renewed job growth helping rental demand meet supply wave. Employers in Baltimore are expected to hire more than twice as many people this year than they did in 2017, with an emphasis on adding more doctors, nurses and educators to the metro. This is, in turn, supporting a fourfold increase in the number of household formations year over year. As the gap between the average mortgage and rent payment widens, renting is becoming more appealing, aiding demand for apartments. Rising demand will be met by higher construction as annual deliveries reached a new peak in 2017, with a similarly high number of arrivals expected this year. Developers are primarily targeting areas in and around downtown Baltimore. Strong demand on the east side of the city has driven the vacancy rate there down 110 basis points over the past four quarters as a record 1,230 new units came online. The wave of new leases also aided rent growth, which returned after rates fell the year before. Metrowide, rent growth will maintain about the same pace as last year, led by above-average gains of 4 to 13 percent for select property classes in secondary submarkets such as Towson, Ellicott City and Columbia.

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