Multifamily Investor Interest Remains Strong in Baltimore, Despite Rising Rates

Baltimore’s multifamily investment market has shown resilience despite the continued rise in interest rates and inflation pressures. As the third quarter comes to a close, more than $1.8 billion in sales have been recorded this year in the Baltimore MSA, surpassing the 5-year average for the first three quarters, according to CoStar.

And while debt becomes more expensive for investors as rates rise, the multifamily market remains healthy, with occupancies high and rent growth steady. While rental increases have slowed from their pandemic peaks, average asking rents remain elevated, mounting the appeal for value-add investments.

Source: CoStar

*5-Year Average for Q1-Q3

Investor interest has been elevated in the suburbs, with Baltimore County and Howard County leading the way with $480 million and $430 million in total sales, respectively.

As many millennials age out of city life and look towards the suburbs to start families, rising mortgage rates have deterred first-time homebuying, increasing renter demand in the county. As the Federal Reserve continues to push rates and home values remain elevated, this demand for rentals in the county could remain a stronghold.

Source: CoStar

As of September 2022

While rising rates could thin the overall buyer pool, investors prepared for this new environment will continue to find opportunities within the changing market. Operators should look for ways to shore up their investments and protect their assets. This includes tightening underwriting standards during acquisitions and spending more time during the due-diligence process. Also, having stricter leasing requirements with tenants, such as requiring credit scores, could help reduce the risk of delinquencies.

To discuss any of our current investment opportunities or for a complimentary opinion of value on your apartment property, call or email Justin Verner: (410)-960-3962 | jverner@harborstoneadvisors.com