Baltimore County Grapples With 'Missing Middle' As Home Prices Rise Amid Sales Slump

BALTIMORE COUNTY - The latest monthly housing statistics report from Maryland REALTORS revealed surprising trends in Baltimore County's real estate market. Despite the noticeable dip in home sales from last year, prices are on the rise.

In May 2023, the county reported a sale of 886 units, marking an 18.2% decrease from the 1,083 units sold during the same period in 2022. The decline in sales is less pronounced compared to April 2023, which saw a total of 689 units sold, a dramatic 30.5% year-on-year decrease from the 991 units sold in April 2022.

Despite the decrease in sales, home prices have shown a robust increase. In May 2023, the average sales price in Baltimore County reached $404,974, a 5.9% rise from the $382,440 recorded in May 2022. The median sales price also increased by 2.2% to $342,500, up from $335,000 a year earlier.

The upward trend in home prices has been an ongoing theme of Maryland REALTOR'S recent reports. April 2023 witnessed a massive 7.5% increase in the average sales price to $417,327 and a 6.9% rise in the median sales price to $348,000 compared to April 2022.

According to Maryland REALTORS® President Yolanda Muckle, the real estate market trends observed in Baltimore County can largely be attributed to low inventory.

Active inventory in May 2023 was recorded at 799, significantly lower than May 2022's 1,027. This low inventory is also reflected in the 'Months of Inventory' figure, which stands at just one month in both May 2023 and May 2022.

Even with the diminishing inventory, the median days on the market have remained unchanged at six days from May 2022 to May 2023. The traditionally busy spring and early summer sales period could explain this, resulting in homes staying short on the market.

County data from Maryland REALTOR's monthly housing report. (Credit: Maryland REALTORS)

Maryland REALTORS® President Yolanda Muckle continues to stress the need for more 'missing middle housing' in Maryland, advocating for a broader diversity in home sizes and price points. She also addressed the critical statewide shortage of 122,000 housing units, insisting that the solution to this problem doesn't lie solely with single-family homes.

"Missing middle" housing refers not to a group of underserved homebuyers but to a range of housing options compatible with single-family homes in terms of size and scale. This term encompasses multifamily units, small-scale houses around a shared courtyard, accessory dwelling units (ADUs), duplexes, and triplexes. Designed to meet the needs of low-income workers, seniors, and young professionals, missing middle housing offers a diverse selection of home sizes and price points and facilitates living in walkable neighborhoods close to local amenities.

The trajectory of missing middle housing changed significantly in the late 1940s and early 1950s due to local zoning codes, which aimed to physically segregate land uses and demographics. Consequently, larger homes were placed in suburbs, often distant from public transportation and walkable amenities. While states like California, Maine, and Oregon have implemented broad zoning reforms to accommodate missing middle housing, Maryland is only beginning to scratch the surface with measures like the Abundant Housing Act and the Thrive 2050 comprehensive plan.

"We are not going to solve this problem by focusing on single-family homes. Marylanders in every county in this state need options," Muckle concluded.

In January, the Baltimore County Council passed a suite of housing reforms to address "missing middle" housing and expand access for all residents. The reforms include creating a permanent Baltimore County Housing Opportunities Fund for continued investment in affordable housing, initiating Baltimore County's first process to designate vacant properties for conversion into housing, updating regulations to expand family use of accessory dwelling units (ADUs), and modernizing townhome construction to cater to residents priced out of the current market.

The modernization of the ADU statute will cater to modern family definitions and remove a provision that prohibits residents from collecting rent from ADU occupants. The proposed townhome construction policy, which lowers the minimum width allowance for townhomes from 20 feet to 16 feet under certain conditions, aims to increase density for rental or homeownership opportunities.

Additionally, Baltimore County Executive Johnny Olszewski signed new legislation to strengthen the rental housing registration and inspection processes in March.

Before the passage of the new legislation, only rental housing properties with six or fewer units, including short-term rentals advertised on websites like Airbnb and VRBO, must be registered and licensed with Baltimore County. Under the new legislation, Baltimore County created a new self-certified registration process for all rental properties with seven or more units. Units are eligible for self-certified registration if they have fewer than three public health, safety, or welfare violations over the past three years.

"Every person deserves access to a safe, quality place to call home, and this legislation is another important step to ensure that is a reality across Baltimore County," Olszewski said. "By modernizing our rental registration process, we are strengthening Baltimore County's ability to make sure that all property owners are fulfilling their obligations to their tenants and our communities."