Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the Baltimore real estate spreadsheet template.
Thinking of buying in Baltimore? Get our financial spreadsheet tailored to this specific market.
Thinking about investing in Baltimore real estate in 2025? You're on the right track.
Despite economic shifts, Baltimore's property market shows promising stability and growth potential.
In this blog post, we will explore why investing in Baltimore real estate remains a solid option.
We rely on reliable data and statistics from trusted sources to provide a comprehensive analysis.
By the end, we draw our own conclusions based on this thorough examination. Enjoy the read!
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
Related analyses:
- Here is why prices are going to climb in 2025 in Baltimore
1) Baltimore's "price-to-rent ratio" is 14.0, indicating it's relatively low
Signal strength: strong
In Baltimore, the price-to-rent ratio is currently at 14.0, which is considered low. This ratio is a key indicator that helps potential investors understand the relationship between property prices and rental income.
When the price-to-rent ratio is low, it suggests that buying a property is more financially advantageous compared to renting. This is because the cost of purchasing a home is relatively low compared to the income you could generate from renting it out.
For investors, a low price-to-rent ratio means that the potential return on investment from rental income is higher. This makes Baltimore an attractive market for those looking to invest in real estate.
If the price-to-rent ratio were to rise above 20, it might indicate that buying is less favorable compared to renting, potentially signaling a less attractive investment opportunity.
Sources: USCensus, Redfin, Zillow
2) Baltimore's "livability score" of 77 indicates a favorable quality of life
Signal strength: moderate
The fact that Baltimore has a livability score of 77 is a positive indicator for potential real estate investors.
This score reflects the city's strong community engagement and vibrant cultural scene, which are attractive to both residents and visitors. Additionally, Baltimore boasts excellent educational institutions, such as Johns Hopkins University, which contribute to a stable and educated workforce.
Moreover, the city offers affordable housing options compared to other major cities, making it appealing for first-time homebuyers and investors alike. These factors combined suggest that investing in Baltimore real estate could yield long-term appreciation and rental income.
However, if the livability score were to drop below 65, it might indicate underlying issues that could affect property values negatively.
Source: AreaVibes
3) A local in Baltimore could buy a house in about 3.1 years, which is relatively quick
Signal strength: moderate
In Baltimore, it would take around 3.1 years for a local to buy a house, which is relatively short compared to many other cities.
This is a positive indicator because it suggests that the housing market is accessible for local residents, making it attractive for potential investors. With a median household income of approximately $59,579, residents have a decent earning capacity to support home purchases.
Moreover, the median home price is about $184,361, which is quite affordable compared to national averages. This affordability means that more people can enter the housing market, potentially increasing demand and property values over time.
If the time to buy a house were to increase significantly, say to over 5 years for a local to afford a home, it might indicate a less favorable investment environment.
Source: USCensus
4) Baltimore's 2025 infrastructure projects, like the "Hanover Street Wetlands" and "Long Quarter Sewer Rehabilitation," are designed to boost real estate value
Signal strength: moderate
Several infrastructure projects in Baltimore, Maryland, are underway, aiming to boost real estate value upon completion in 2025 or 2026. These projects include the Hanover Street Wetlands and Long Quarter Sewer Rehabilitation, which are expected to boost the area's appeal and property values.
The Hanover Street Wetlands Project, set to be completed in 2025, focuses on improving environmental resilience and community development in South Baltimore's Middle Branch area. By creating an intertidal wetland, this project will prevent flooding and shoreline erosion while providing habitat for native species. Additionally, public access improvements such as boardwalks, fishing piers, and trails for walking and biking are expected to boost the area's attractiveness, potentially boosting real estate value.
The Long Quarter South Sewer Rehabilitation, scheduled for completion in June 2025, involves rehabilitating 65,598 linear feet of sanitary sewer main in Baltimore County. While primarily focused on infrastructure improvement, this $5.5 million project could indirectly contribute to increased property values by ensuring reliable and modern sewer systems.
These projects, along with others like the Charles Street Water Main Replacement and Falls Road Water Main Replacement and Rehabilitation, aim to boost the livability and attractiveness of the area. Improved water infrastructure and reliable sewer systems can positively impact property values, making buying a property in Baltimore a potentially good investment.
Sources: Maryland.gov, Baltimore County Public Works
5) Airbnb or "short-term rental" in Baltimore offers a fairly appealing profit margin of 7.0%
Signal strength: moderate
The cash-on-cash return on Airbnb in Baltimore is 7.0%, which is considered moderately attractive for investors. This percentage indicates that the income generated from short-term rentals is relatively healthy compared to the initial cash investment.
In Baltimore, short-term tenants often include business travelers attending conferences or meetings, as the city hosts numerous events and has a strong business presence. Additionally, tourists visiting historical sites and cultural attractions are common, as Baltimore is known for its rich history and vibrant arts scene.
These types of visitors typically seek convenient and comfortable accommodations that offer a more personalized experience than traditional hotels. As a result, properties that cater to these needs can maintain high occupancy rates and generate consistent income.
If the cash-on-cash return were to drop below 5.0%, it might indicate a less favorable investment due to lower profitability and potential challenges in attracting tenants.
Source: Mashvisor
6) The "cash-on-cash return" of 7.0% for long-term rentals in Baltimore is reasonably appealing
Signal strength: moderate
The cash-on-cash return of 7.0% in Baltimore indicates that the income generated from the property is relatively high compared to the initial investment. This percentage suggests that investors can expect a moderate return on their investment, making it an attractive option for those looking to enter the real estate market.
In Baltimore, long-term tenants often include students attending local universities and professionals working in the city's healthcare and technology sectors. These tenants typically seek stable housing options, providing a consistent rental income for property owners.
Additionally, Baltimore's affordable cost of living compared to other major cities attracts families and individuals who plan to stay for extended periods. This demand for rental properties ensures a steady stream of potential tenants, further supporting the investment's viability.
If the cash-on-cash return were to drop below 5.0%, it might indicate that the investment is less favorable, as the returns would not sufficiently compensate for the risks involved.
Source: Mashvisor
7) Baltimore's median home price is significantly lower, at 58% below the national average
Signal strength: minimal
The fact that Baltimore has a median home price 58% below the national average suggests that there is significant room for property value appreciation. This means that buying a property now could potentially lead to substantial returns on investment as the market catches up with national trends.
In Baltimore, the most expensive properties are likely to be luxury townhouses in areas like the Inner Harbor, where demand is high due to proximity to amenities and waterfront views. On the other hand, the cheapest properties are often small single-family homes in neighborhoods like Sandtown-Winchester, which may require renovation but offer low entry costs.
Investors should consider these dynamics when evaluating potential investments, as lower initial costs can lead to higher profit margins if the market continues to grow. The diversity in property types and areas provides opportunities for different investment strategies, whether focusing on high-end markets or affordable housing.
If the median home price in Baltimore were to rise significantly, approaching or exceeding the national average, this signal might suggest a reduced potential for future growth and appreciation.
Source: Zillow
So, is investing in Baltimore real estate a solid option in 2025? Absolutely, it is.
Investing in Baltimore real estate in 2025 is a promising opportunity. The city's price-to-rent ratio of 14.0 indicates that buying is more financially advantageous than renting, offering higher potential returns on investment.
Baltimore's livability score of 77 highlights a favorable quality of life, with strong community engagement and excellent educational institutions. This makes the city attractive to both residents and investors, suggesting long-term appreciation and rental income potential.
Additionally, the median home price is 58% below the national average, providing significant room for property value appreciation. With infrastructure projects like the Hanover Street Wetlands and Long Quarter Sewer Rehabilitation underway, the city's real estate value is poised to increase.
Moreover, the cash-on-cash return of 7.0% for Airbnb properties is appealing, indicating healthy income potential from short-term rentals. These factors combined make Baltimore a compelling choice for real estate investment in 2025.