Author Topic: Baltimore RE - Post Riots  (Read 4954 times)

jhess002

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Baltimore RE - Post Riots
« on: May 21, 2015, 11:50:49 AM »
Many think that the real estate prices in Baltimore will plunge post-riots (http://www.baltimoresun.com/business/bs-bz-economic-impact-riots-20150501-story.html#page=1).  Just looking at some of the current properties in the better neighborhoods, there seems to be a slow down already occurring.     

Does anyone think this could be a good deal for buying rental properties for the long term (since the city must surely recover at some point)? Although some people will leave the city (weakening the rental market), it seems that even if the rental market softens it could still be a good deal if the price paid is really a bargain. 

In any event, it will be interesting to monitor Baltimore prices over the next 6-12 months.

RequiemforEnnui

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Re: Baltimore RE - Post Riots
« Reply #1 on: May 21, 2015, 02:29:27 PM »
I live in the DC metro area.

I wouldn't count on Baltimore recovering anytime soon. There's no driving force for that to happen - tax base continues to shrink, no new manufacturing or jobs moving in, etc etc etc. There's parts of town that are still good, but if you're buying in less than optimal areas with the idea they're going to bounce back... the catalyst simply isn't there.

It's not Detroit, but Detroit is an example of the possible downsides of that approach.

hdatontodo

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Re: Baltimore RE - Post Riots
« Reply #2 on: May 21, 2015, 08:11:28 PM »
There have been 100 murders SO FAR this year in Baltimore. Avoid.

ShoulderThingThatGoesUp

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Re: Baltimore RE - Post Riots
« Reply #3 on: May 22, 2015, 04:43:20 AM »
City of Baltimore has a tiny area. There's no imperative for it to improve. There are hundreds of municipalities like it all over the United States, it's just one of the biggest.

If you're a go-getter living in a bad neighborhood in Baltimore, are you going to want to pay the high taxes and deal with the corrupt government once you have options? Of course not, you're going to move.

Guys, should I buy real estate in Benghazi? It's bound to improve someday!

electriceagle

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Re: Baltimore RE - Post Riots
« Reply #4 on: June 01, 2015, 05:06:45 AM »
If you're going to rake the bottom, go and get a $1 house in Detroit. At least you know that prices have hit bottom there.

ShoulderThingThatGoesUp

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Re: Baltimore RE - Post Riots
« Reply #5 on: June 01, 2015, 11:43:47 AM »
There are houses available from the city of Philadelphia for $1000. At least Philadelphia is growing.

theoverlook

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Re: Baltimore RE - Post Riots
« Reply #6 on: June 01, 2015, 11:48:32 AM »
If you're going to rake the bottom, go and get a $1 house in Detroit. At least you know that prices have hit bottom there.

You're required to rehab those up to current code within 6 months; a $1 house has never been so expensive.

CashFlowDepot

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Re: Baltimore RE - Post Riots
« Reply #7 on: June 01, 2015, 07:51:50 PM »
Pass on Baltimore.  I get a lot of motivated seller leads through my web sites.  It seems everyone is wanting out of, not just Baltimore, but Maryland in general. 

You want to buy in to a market with a population increasing, not decreasing.

cityfolks

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Re: Baltimore RE - Post Riots
« Reply #8 on: June 12, 2015, 10:37:32 AM »
I don't disagree with previous posters, but I'd point out a few more things to consider. The city does have sub-par infrastructure, a possibly-shrinking population, and considerable property taxes -- but it does have a decent sized community of young, upwardly mobile types who would be looking for rentals, especially in trendy areas of town. You might not be able to flip the house to sell it, but I would think you could have a steady stream of renters. There is considerable development going on in several parts of the city, with investment from companies like Under Armor and steady employment (for certain groups of people) in the form of Social Security Administration and federal contractors if not the traditional blue collar union jobs. Depending on the kind of market you're interested in, there is certainly cheap housing to be had, and for every food desert there's an expanding Whole Foods - I wouldn't say Baltimore's future is a foregone conclusion.

ShoulderThingThatGoesUp

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Re: Baltimore RE - Post Riots
« Reply #9 on: June 12, 2015, 11:07:33 AM »
I don't disagree with previous posters, but I'd point out a few more things to consider. The city does have sub-par infrastructure, a possibly-shrinking population, and considerable property taxes -- but it does have a decent sized community of young, upwardly mobile types who would be looking for rentals, especially in trendy areas of town. You might not be able to flip the house to sell it, but I would think you could have a steady stream of renters. There is considerable development going on in several parts of the city, with investment from companies like Under Armor and steady employment (for certain groups of people) in the form of Social Security Administration and federal contractors if not the traditional blue collar union jobs. Depending on the kind of market you're interested in, there is certainly cheap housing to be had, and for every food desert there's an expanding Whole Foods - I wouldn't say Baltimore's future is a foregone conclusion.

Neither is Benghazi's.

Jack

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Re: Baltimore RE - Post Riots
« Reply #10 on: June 12, 2015, 11:42:16 AM »
Pass on Baltimore.  I get a lot of motivated seller leads through my web sites.  It seems everyone is wanting out of, not just Baltimore, but Maryland in general. 

You want to buy in to a market with a population increasing, not decreasing.

That's interesting. The company I just got hired by is expanding from Maryland into Atlanta because they were having a hard time finding talent in Maryland. They blame it on the higher cost of living (and also to the NSA etc. hiring all the good comp sci people in the area), but maybe people don't want to live there for other reasons?

Sid Hoffman

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Re: Baltimore RE - Post Riots
« Reply #11 on: June 12, 2015, 12:26:25 PM »
It took me 15 years to reach this point, but in my life experiences and 3 moves, I have determined the best indicator is public schools.  Only buy/live in places that have excellent public schools.  I say that because there are some areas that have great private schools, so people move there figuring everything is A-OK because they can send their kids to private school, but everything I have seen tells me that the kids are the future.  If the public schools are good, the kids will be all right, and the area will grow and appreciate.

When I look at the greatschools rating for Baltimore I see nothing but a sea of red.  Meanwhile when I pick the next city I want to move to, it's almost entirely green, with a small area of yellow.  For single family homes, I personally feel that public school ratings are the most reliable indicator if you should invest there or live there yourself.

surfhb

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Re: Baltimore RE - Post Riots
« Reply #12 on: June 13, 2015, 09:35:27 AM »
Correct me if I'm wrong but are there any cities in the U.S. which real estate values have been negative in the long term?   30+ years?

Can't think of any ;)

Sid Hoffman

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Re: Baltimore RE - Post Riots
« Reply #13 on: June 14, 2015, 07:34:49 PM »
Correct me if I'm wrong but are there any cities in the U.S. which real estate values have been negative in the long term?   30+ years?

Can't think of any ;)

Adjusted for inflation to constant dollars, it would probably be many places where there is migration away from that place.  I suspect most of Detroit has negative property values when adjusted to, say, 1985 constant value dollars.  I can think of lots of places even in my own town that have gone down the crapper.  Any huge metro area tends to develop real estate hot spots and black holes as time goes on.

NoNonsenseLandlord

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Re: Baltimore RE - Post Riots
« Reply #14 on: June 15, 2015, 06:37:50 AM »
Correct me if I'm wrong but are there any cities in the U.S. which real estate values have been negative in the long term?   30+ years? Can't think of any ;)

There are cities that maybe less.  Especially after taxes, inflation, maintenance and management.  Compare that to a REIT or a bond where you do not have to do anything.

If you cannot beat the rate of inflation, you lost money.


FrugalFisherman10

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Re: Baltimore RE - Post Riots
« Reply #15 on: June 16, 2015, 07:57:08 AM »
Pass on Baltimore.  I get a lot of motivated seller leads through my web sites.  It seems everyone is wanting out of, not just Baltimore, but Maryland in general. 

You want to buy in to a market with a population increasing, not decreasing.

That's interesting. The company I just got hired by is expanding from Maryland into Atlanta because they were having a hard time finding talent in Maryland. They blame it on the higher cost of living (and also to the NSA etc. hiring all the good comp sci people in the area), but maybe people don't want to live there for other reasons?
Jack - Congrats on the new job!

It took me 15 years to reach this point, but in my life experiences and 3 moves, I have determined the best indicator is public schools.  Only buy/live in places that have excellent public schools.  I say that because there are some areas that have great private schools, so people move there figuring everything is A-OK because they can send their kids to private school, but everything I have seen tells me that the kids are the future.  If the public schools are good, the kids will be all right, and the area will grow and appreciate.

When I look at the greatschools rating for Baltimore I see nothing but a sea of red.  Meanwhile when I pick the next city I want to move to, it's almost entirely green, with a small area of yellow.  For single family homes, I personally feel that public school ratings are the most reliable indicator if you should invest there or live there yourself.
good point!

Apocalyptica602

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Re: Baltimore RE - Post Riots
« Reply #16 on: June 26, 2015, 01:29:03 PM »
Baltimore City, I'd struggle with. I live and work in the suburbs north of Baltimore (Baltimore County, not Baltimore City). A lot of young professionals I know like to LIVE in Baltimore City, (but only in trendy ($$$) neighborhoods like Federal Hill, Fells Point, the Inner Habor etc.) and COMMUTE to where I live in the suburbs to work in the variety of high-tech and manufacturing companies here.

My issue with Baltimore as opposed to where I grew up in the NYC area, is that Baltimore is extremely stratified yet also is a relatively small city. Whereas in any of the 5 boroughs in NYC you have your 'good' and 'bad' neighborhoods that border each other but have 10-20 blocks of 'transition', whereas in Baltimore that number is more like.... 3.

I'll spare you the various 'Charm City, more like Harm City' jokes, someone already made a comment about the murder rate.

That being said, I absolutely love where I live now in the Hunt Valley area, and will likely be looking to buy a home in the Bel Air region good schools and the buy v rent numbers shake out on the buy side by rule of thumb House Price/Yearly Rent < 16.

So either you can speculate on a 'trendy' rental in one of the downtown districts for young professionals, or speculate on a house in a good school district in the suburbs maybe in Harford county or something where the young professional would want to move their family to before they have money to afford a down payment.

http://www.greatschools.org/maryland/bel-air/harford-county-public-schools/ *shrug*

Disclaimer: I'm by no means a seasoned real estate investor and am not even a first time homeowner yet, just commenting on the area itself.