Apartment rent growth in Baltimore in 2018 was among the lowest in large cities in the U.S., according to website Rent Café.
The website’s annual year-end report, using data from Yardi Matrix, found rents increased in Baltimore by 1.1 percent year over year. The average rent charged in the city at the end of 2018 was $1,249 a month.
Nationally the average apartment rent at the end of the year was 3.1 percent higher than in 2017, at $1,419 a month.
Baltimore, however, kept decent company in terms of other large cities with low rent growth.
It finished No. 2 on the list of the five slowest growing rents behind Queens in New York, which experienced a .2 percent year-over-year decrease in rents, followed by Boston, Houston, and Brooklyn, which posted rent increases between 1.2 and 1.7 percent year over year.
Baltimore’s slow rent growth may not last for long because of reduced supply. After experiencing a boom in new apartment construction in recent years, building recently has notably slowed.
“Construction starts have pulled back in most markets compared to one year ago. Areas with the most notable slowdown are Salt Lake City, Oklahoma City, Colorado Springs, Baltimore and Dallas,” according to a Freddie Mac mid-2018 multifamily report.
Freddie Mac, a government-sponsored enterprise providing multifamily lending, found Baltimore produced a 3,500 unit surplus in in total housing completions in 2017. In the years between 2008 and 2017, however, there was a 4,400 unit shortage in the same statistic.
Commercial real estate brokerage firm Marcus & Millichap’s most recent outlook released in August predicted a strong multifamily market in the Baltimore metro area through 2018. The firm’s optimism was based on anticipation of employers hiring twice as many workers as 2017, and a growing gap between the average rent and mortgage payment.
Demand for apartments on the east side of the city, according to the firm, drove the vacancy rate down 110 basis points over the prior 12 month period. The drop in vacancy in that submarket came despite 1,230 units delivering in that submarket.
“Improving demand amid a consistent construction pipeline will enable a further drop in vacancy as rent growth surpasses 2 percent again this year,” Marcus & Millichap predicted.