Leasing of top-flight apartments in the Baltimore metro area slowed last quarter, but demand still remained relatively high, according to a recent report.
Renters in the region leased nearly 2,900 Class A units in the second quarter, according to Delta Associates research, with just less than 1,400 units rented in Baltimore. Vacancy rates ticked up from 3.7% last quarter to 4.1% in the region. The number of unoccupied new units in the suburbs crept up to 4.3% and to 3.7% in Baltimore.
“Despite the slowdown, absorption is still well above normal for the metro area,” according to the report.
While leasing activity decreased, the overall demand for rental new rental units remains in line with a supply-constrained housing market, which pushes up the price of entry for first time homebuyers and sustains demand for apartments.
The median home price in the Baltimore region, according to Data from Bright MLS via MarketStat by ShowingTime, reached $300,000 in June. That’s the highest median price that firm recorded in June since before 2010. Maryland Realtors found the average home price in the state last month surged 4% and median price jumped 3.1% year over year.
Popular submarkets, such as Columbia and Federal Hill, experienced the steepest drops in leasing activity through the second quarter. While submarkets, including downtown Baltimore, Annapolis and the northern suburbs, posted solid increases in leasing activity between April and June.
The most recent report by Delta Associates found the supply pipeline in the metro area down 8% from June 2018. Only the submarkets to the north and northwest of the city have more than four years of supply based on the last 12 months of leasing activity.
Despite the slowdown, demand for units still remains higher than the historic average. Effective rents in the suburbs increased by nearly five times the citywide average increase, Delta Associates found. Rents in the city did increase for a second consecutive quarter inching up by nearly 1%. The effective average rent for the overall region reached $1,756 a month, roughly a $1.84 per square foot.
While there’ been some slowdown a significant number of projects are planned or recently delivered. Greenberg Gibbons this spring said it intends to partner with firms to add new units at Foundry Row and Hunt Valley. Meanwhile apartments like the Luminary at 1 Light St. downtown, and the Liberty Harbor East delivered earlier this year.
The per-project leasing pace for 13 actively marketed projects in the area, according to Delta Associates, was roughly 18 units a month during the second quarter. In June of last year that figure was 14 units leased a month.