Are you looking for a place to call home with a bountiful option of suburban and urban properties? Look no further than Maryland. It is a state with something for everyone.
Maryland is a state where you can drive to the ocean or the mountains on the same day. Prospective homeowners and investors will find properties in vibrant urban centers and sprawling suburban communities throughout the Maryland housing market.
As with the rest of the country, the key trends and factors influencing the real estate market are tied to the growing economy. With a robust GDP and inflation staying under control, there won’t be anything near a burst housing bubble in Maryland.
What does the Maryland housing market hold for the coming months and years? Forbes recently provided an overview of the Maryland real estate trends, finding home prices rising 2.5% per quarter. If the trend holds through 2024, it will make Maryland a rich opportunity at all levels.
In this article, we’ll explore all aspects of the Maryland housing market and what you can expect if you enter that market as a buyer or seller.
Market Trends
When prospective homeowners begin their quest for a new home, they start with two main factors: price and location. That general overview helps narrow the choices of where to focus their attention.
Median Home Price and Appreciation Rate
Neighborhood Scout is a real estate resource that provides information on median home prices and appreciation values nationwide. They put the median home price in Maryland at $429,048. The appreciation rate tracked over the last 12 months is 4.58%. If that holds, buying a Maryland home would be a smart Maryland real estate investment.
Inventory Levels and Days on Market
The Maryland inventory levels of homes and days on the market contribute to determining the price. Real estate resource site Redfin finds that there were 16,530 homes for sale across the state in October.
Maryland Buyer Demand and Competition
In the housing market in Maryland, it is clear that prospective buyers need to act fast. Redfin finds that 41.5% of homes sold above list price while only 32.9% had price drops. That could mean you might have to make an offer close to or above the listing price to be taken seriously.
Mortgage Rates and Affordability
Setting up a mortgage loan is essential to buying a home or investing in a rental property. Financial resource site Bankrate puts the interest rates for a 30-year fixed Maryland mortgage rate at 7.84%. In August, that rate hit its highest mark since 2000. That is a number that investors need to keep track of to determine if now is the best time to buy.
Market Drivers
Several key market drivers fuel Maryland’s real estate market. Maryland’s economic growth and potential for job creation contribute to its population growth. Maryland’s new development investment opportunities follow when communities expand into the suburbs. Here’s a look at the market drivers that are part of the Maryland real estate arena:
Maryland Economic Growth and Job Creation
Maryland’s economy ranks 17th in size compared to the rest of the country. That is according to the data resource site USA Facts. According to that site,
Maryland’s unemployment rate is 1.8%. That is well below the national rate of 3.9%.
As for the GDP growth rate in the state, it is 0.7%, which is up from 0.3% in the previous quarter. Those numbers indicate that Maryland’s economy is steady.
Population Growth and Demographics
The state website compiles up-to-date statistics about Maryland’s population growth. They find that the results of the 2020 census put Maryland’s population at 6,177,224. That makes it 18th in the country. They project that Maryland’s population will grow by 7% every 10 years.
That same 2020 census report finds that Maryland’s demographic breakdown consists of a population that is 57% white, 31% African American, 7% Asian, and 11% Hispanic. It is a diverse population that benefits from those shared cultures.
New Development and Investment
Real estate search engine Zillow puts the average rent in Maryland at $1,833. Depending on the property, that rental number can be as high as $16,900. That median rental price is $30 less than it was this time last year. It is a nominal drop that indicates a reliable opportunity for an investment in the Maryland rental market.
Quality of Life and Amenities
Maryland boasts a wealth of hidden treasures. It has picturesque harbors and beaches, expansive state parks, and scenic railroads. It is a state that blends small-town intimacy and bustling metropolises. Maryland residents can also take swift transit to prominent cities like Washington, D.C., Philadelphia, and New York City.
Along with exceptional school districts, Maryland is a gourmet haven celebrated for its succulent blue crab. It also boasts popular MLB and NFL franchises. There is something for everyone in Maryland.
Regional Markets
Maryland comprises five regions, each with their distinctive features. Those regions include the following:
- Western Region
- Capital Region
- Central Region
- Southern Region
- Eastern Shore Region
The following is a deeper dive into the regional markets.
Baltimore Metropolitan Area
The Baltimore Metropolitan Area is in the state’s Central Region and is the most populous area in Maryland. It consists of several separate counties that surround Baltimore.
Baltimore City
Baltimore City serves a culturally diverse population living in a blend of historic row houses, contemporary condominiums, and townhouses. Among the stand-out features of the city are the Inner Harbor business district and a thriving art, music, and theater scene.
Baltimore County
Baltimore County is a sprawling enclave of suburban Maryland neighborhoods, each with its unique charms. An array of picturesque parks, top-tier schools, restaurants, and shopping undoubtedly make Baltimore County an ideal place to live.
Howard County
Howard County is situated between the bustling hubs of Baltimore and Washington. With a flourishing economy and a business-friendly atmosphere, Howard County accommodates a thriving community that benefits from proximity to an impressive array of federal agencies, universities, Fortune 500 corporations, and leading entities in the technology, defense, and healthcare sectors.
Anne Arundel County
Folks who call Anne Arundel County home have access to 533 miles of coastline comprising the Chesapeake Bay. It also has two state parks and 34 special-use areas encompassing an ice rink, aquatic center, recreation center, and boat ramps. Moreover, you’ll find four regional parks, 119 school recreation parks, two sports complexes, and 95 community and neighborhood parks.
Washington, D.C. Metropolitan Area
Referred to as Greater Washington, the National Capital Region, or informally as the DMV (representing the District of Columbia, Maryland, and Virginia), the Washington D.C. Metropolitan Area is the center of the United States’ federal capital. Based on the number of influential residents and their staff, it is no wonder that the Washington D.C. Metropolitan Area is one of the most prosperous regions in the United States.
Montgomery County
Montgomery County is the most populous county in the state. Here is where you’ll find the major population centers of Silver Spring, Bethesda, Rockville, and Gaithersburg. According to the U.S. Census Bureau, the average household income in Montgomery County is among the highest in the country.
Prince George’s County
Prince George’s County is in the heart of the Baltimore/Washington corridor. It borders Washington, D.C., and is just 37 miles south of Baltimore. The county encompasses almost 500 square miles and has an urban atmosphere that still provides a scenic and peaceful place to live, work, and play.
Frederick County
Frederick is the county’s principal city, less than an hour from Washington, D.C., Baltimore, and Gettysburg. It is a county surrounded by mountain views and home to wineries, orchards, and quaint main street communities.
Carroll County
Carroll County has eight incorporated municipalities that include Taneytown, Hampstead, Sykesville, and the county seat of Westminster.
Annapolis Metropolitan Area
The Annapolis Metropolitan Area stretches along Maryland’s Western Shore. It is home to the state capitol, Annapolis. Known as “America’s Sailing Capital,” Annapolis also has the U.S. Naval Academy and St. John’s College. St. John’s is one of the country’s oldest institutes of learning, founded in 1696.
Cumberland Metropolitan Area
The Cumberland Metropolitan Area is a 130-mile drive to Baltimore in one direction or D.C. in the opposite direction. It is an area marked by mountain ranges that attract an annual snowfall of 30 inches. Cumberland is known for its antique and specialty shops, making up an idyllic downtown shopping and dining district.
Allegany County
Known as the “mountain side of Maryland,” Allegany County consists of 70,000 acres of bike trails, breweries, wineries, and endless outdoor possibilities. It is also home to the Allegany College of Maryland, Frostburg State University, and the International Beauty School.
Hagerstown Metropolitan Area
The Hagerstown Metropolitan Area lies mainly within the productive Cumberland and Shenandoah valleys. It also provides access to Washington, D.C., or Baltimore. Hagerstown city is known as “Hub City” because of its history of being a hub for railroad lines. Today, it is a hub for commerce and recreation that draws families and visitors from the tri-state area.
Washington County
Washington County has a rich history dating back to the Civil War. It is home to the South Mountain State Battlefield and Antietam National Battlefield. Washington County also has a bustling cultural scene. It includes the Maryland Theatre and Performing Arts Complex, where the Maryland Symphony Orchestra performs.
The county’s five national and eight state parks offer many hiking, birding, boating, kayaking, biking, or photography options. The charming towns of Clear Spring, Boonsboro, Hancock, Funkstown, Keedysville, Williamsport, Sharpsburg, and Smithsburg serve a bounty of boutique shopping, restaurants, wineries, and spectacular vistas.
Eastern Shore
The Eastern Shore of Maryland consists of all counties east of the Chesapeake Bay. It includes Caroline, Cecil, Dorchester, Kent, Queen Anne’s, Somerset, Talbot, Wicomico, and Worcester. The Eastern Shore offers excellent boating, biking, and birding, among many other attractions. It also includes the popular vacation destination Ocean City.
Western Maryland
Western Maryland is the mountainous side of the state, noted for rural landscapes, small towns, and numerous state parks and outdoor recreation opportunities in Washington, Allegany, and Garrett counties.
Maryland Investment Strategies
Investing in the Maryland real estate market in 2023 is a promising option for cultivating wealth. Diversifying investment portfolios, generating favorable cash flow, and witnessing long-term asset value appreciation exemplify the benefits of investing in real estate.
Different Ways to Invest in the Maryland Real Estate Market
The real estate market presents various Maryland investment opportunities. It includes residential properties, commercial real estate, and real estate investment trusts (REITs). Proactive real estate investors can also consider property flipping or real estate development projects.
Acquiring rental properties in key locations is also considered a wise investment. Those rental properties can include multifamily units, condominiums, or vacation rentals.
Tips for Finding and Evaluating Investment Properties
To find the right real estate investment opportunity, you must conduct comprehensive market research. That will help you identify emerging Maryland neighborhoods with essential factors like growth potential, amenities, and proximity to critical infrastructure.
It would help if you got into the habit of scrutinizing property listings.
Once you find a potential property, conduct thorough due diligence. This includes assessing the property’s condition and potential renovation costs. Additionally, you should look at the neighborhood’s overall property appreciation trends.
Be sure to engage with local real estate agents, attend property auctions, and leverage online platforms to expand your property search and access a broader range of investment opportunities in the Maryland real estate market.
Strategies for Managing and Maximizing Your Rental Income
Once you close the deal on a rental property, you want to implement a strong tenant screening process. That should include background checks and credit evaluations to ensure reliable and responsible tenants. Regularly maintain and upgrade your rental properties to enhance their appeal. That will help you attract high-quality tenants and potentially command premium rental rates.
You must also use effective property management techniques. These include timely rent collection, proactive maintenance, and responsive communication. Those plans allow you to foster positive tenant relations and minimize vacancies. Thus, it will maximize your rental income in the competitive Maryland real estate market.
Make a Smart and Lucrative Move to Maryland
Maryland, known as “the land of pleasant living,” has evolved into a lucrative hub for real estate investments, offering diverse opportunities in both residential and commercial sectors. The state entices prospective homeowners and seasoned investors with its vibrant urban centers and sprawling suburban communities.
With a robust economy, stable GDP growth, and promising market projections, Maryland remains a desirable landscape for buyers, sellers, and investors to explore. While mortgage rates play a crucial role in home prices in Maryland, the state’s economic growth, population expansion, and new development initiatives continue to bolster its real estate landscape.
Moreover, Maryland’s rich cultural diversity and abundance of amenities contribute to its appeal. It is an attractive prospect for those seeking an enhanced quality of life and promising investment returns.
The Maryland real estate market presents various investment options, from residential properties and commercial ventures to real estate investment trusts and rental properties. Maryland beckons individuals and families to seize the moment and make their mark in this dynamic real estate landscape.
