The real estate market is an interesting place to be involved with right now. More specifically, in the Baltimore frum community’s real estate market, it is quite challenging to find an affordable home that is both in good condition and located in a safe area. In a broad sense, there are record-low interest rates; however, the average house is selling for around $35,000 more than it would have a year ago. People are quickly jumping to the label of a “seller’s market,” and are therefore either begrudgingly paying the higher prices or holding out until the dust settles. In truth, though, the current real estate market, with its higher prices and smaller selection, is also impacted by a few other lesser-known factors.
First are the low
interest rates (currently around 2.9%) which allow people to borrow larger
amounts of money. While appearing as a blessing at first glance, at the same
time, it tests the market’s value and drives home prices higher. Second, the
new work-from-home norm created by the COVID-19 pandemic led to an uptick in
home improvements (such as an addition, renovation, or home office). In such
cases, owners are more reluctant to forego the upgrades they just invested in,
causing a decrease in the supply of available homes on the market.
Interestingly, and third, it has been suggested that these home improvements
likewise raised the price of home-building materials. Factoring this into the
equation, developers decreased the number of homes they were building or
rehabbing as the new, exorbitant supply prices often made their margins
unreasonable.
When compounded on
each other, these all played a role in limiting the supply of eligible homes on
the market and, given the universal rule of supply and demand, led to an
escalation in current real estate pricing. And then we have to add the
prerequisite unique to the frum
community, in which people are generally bound to the areas within the eruv and
within walking distance to a shul – both of which make an already constrained
funnel even more limited and create an even more significant lack of inventory.
Taking into account that our community is baruch
Hashem a rapidly growing, vibrant community, an inevitable expansion has
become even more pertinent.
First time
homebuyers are the ones most impacted by the current real estate market as it
is extremely hard for the average, young, hardworking family to afford a home
within the eruv and in a safe area. However, as many are aware, the eruv of
Baltimore expanded this past year from Lightfoot Drive and Sylvale Road to
Green Summit Road, and now includes the Falls Gable and Summit Park areas. A
young family I know of personally was looking for their first home last summer
and were met with difficulty finding a reasonably-priced home in a good and
safe location. Following the extension of the eruv, they began looking in the
new areas included in the eruv and were happy to find a spacious and affordable
home in the expanded area. They signed on their new home about 10 days after
the eruv was extended. The young family has since informed me that they are
very satisfied with the quality of their home as well as the location and
safety of their neighborhood. In fact, since they moved into the new area about
eight months ago, homes of a similar size and quality in their neighborhood are
now selling $50,000 to $70,000 more than what this family purchased their home
for – indicating the increased popularity of those homes. However, despite this
increase in price, the homes in this area are still affordable when compared to
the prices of similar-quality homes in more central areas within the eruv.
Another up-and-coming
area in the frum community is the
Mount Washington neighborhood, between Cross Country and Northern Parkway, from
Pimlico to the 83. This area has always been in the eruv, however a limited
number of frum Jews lived there. This
neighborhood has homes with nice-sized yards and is in a safe, residential
area. Truth be told, many homes in Mount Washington are surprisingly local and
could be as close as a 10-minute walk to the Greenspring neighborhood and
shuls. At the time of the writing of this article, I know of one frum family under contract for a home in
this area and a few others who are interested in the neighborhood. It will be
interesting to see how it all unfolds.
Although it may
seem daunting to look for a home right now, I would urge buyers to continue
searching. I strongly believe that there needs to be a balance: On the one hand,
the market is limited, yet a rash, expensive home buying mistake could tally up
to the tens of thousands. Don’t close doors too quickly; finding a new home in
this market is completely possible. And it never hurts to keep your options
open to different areas.
Raphael Mifsud has
been a certified real estate agent for over seven years in Michigan and for the
past two years in Maryland. He is now the broker of Buyers First Realty which
services the greater Baltimore area. He can be reached at 443-360-5360 or by
email at Raphael@BuyersFirstRealty.us.
