Baltimore’s pool of educated talent has helped maintain a relatively stable multifamily demand level, despite the large volume of new supply. As the development boom continues, with 5,800 units under construction, consistent job gains in high-earning sectors should stimulate absorption.
The metro’s largest employment sector—education and health services—led job gains (9,500), followed by professional and business services (6,800). Construction (6,300) recorded the highest year-over-year jump (5.6 percent), due to record development levels, especially in Baltimore’s downtown area. Growth in office-using sectors has led to a development pipeline totaling $1.4 million square feet of office space encompassing both urban and suburban projects, with new supply attracting tenants such as WeWork. The coworking company announced plans to occupy two floors in a new high-rise underway in the thriving Inner Harbor.
New multifamily product is almost exclusively upscale, which led local authorities to create the Affordable Housing Trust Fund, aiming to rehabilitate and create 4,100 affordable units over the next decade. The fund will be fueled by two new taxes for real estate transactions exceeding $1 million, which might further slow down investment. Rent growth is also bound to remain tepid, as we expect a 1.7 percent rise for the whole of 2018.