Good times, bad times

Going up: Fat economic times escalate home prices in many desirable city neighborhoods.

June 22, 2000

FOR MANY years, Baltimore has been known as a place where a good middle-class home came more cheaply than in comparable cities. That's generally still true. But prices in some of the most desirable sections of the city are skyrocketing.

While many of the dynamics are local, Baltimore is simply following a national trend.

An overall drop in crime, high gasoline prices and good economic times have reignited well-heeled buyers' and renters' interest in city living throughout the country. In San Francisco, Denver, Boston, Atlanta and Seattle, prices have zoomed into the stratosphere.

In Baltimore, the market is strong for upscale city homes that are convenient to private schools in the northern part of the city. The demand is so high that nearby areas, many of which have languished for years, have picked up.

That activity will net more property tax revenue from higher valuations.

The news is not so good to buyers and renters if they are not part of the booming economy. They may have to skip their first choices and settle for less pricey housing.

"If you don't have a high-paying, high-tech job, you're in trouble. The top end has perverted the market," said Andrew Cuomo, secretary of the U.S. Department of Housing and Urban Development. He warned that the nation is in a housing affordability crisis.

Although Baltimore seemingly has a surplus of houses, top-end homes are limited. Thus the current crunch is likely to be restricted to a few "hot" neighborhoods. That is little consolation, though, to a middle-income buyer who sees a dream house becoming unaffordable in bidding wars.

Ultimately, the excesses will be tempered. A cooling in the economy and higher interest rates will do the job. But if confidence in the city's turnaround keeps increasing, so will the prices of desirable homes.

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