Dahlia Kaminsky was showing off Patterson Park, pointing out rehabbed houses that have emerged from under their old Formstone, when a real estate agent called her cell phone to ask if one could be had for $120,000 or less.
Her answer would have been unimaginable just a few years ago.
“Oh gosh – there’d be nothing in that price range,” said Kaminsky, sales and marketing manager for the Patterson Park Community Development Corp., whose homes are being purchased for triple their 1999 average. “We couldn’t even come close.”
It’s a turnaround neighborhood in a turning-around city, though the comeback is not by any means complete.
Home values in Baltimore – battered in the 1990s by drugs, violent crime, real estate scams, population drain and recession – are seeing a resurgence that surprises even the housing experts. The average sale price of a city home rose 59 percent from 1999 through last year, 18 percentage points above the national average and nearly equal to the region as a whole, according to real estate agent data from Metropolitan Regional Information Systems Inc.
The city is developing a spine – an uninterrupted swath of ZIP codes with at least 60 percent price appreciation that runs from the waterfront to North Baltimore via the Jones Falls Expressway.
But fast appreciation in hot neighborhoods is helping to hide trouble on the blighted east and west ends of the city. If you add in for-sale-by-owner homes, average prices dropped in two city ZIP codes, researchers at the Johns Hopkins University found. And it’s even worse when the effects of inflation are calculated.
Widening gap
Baltimore has some of the region’s fastest-appreciating enclaves. It also has the slowest. And the gap between flourishing and decaying areas is widening.
But at the same time, far more neighborhoods are improving than once did. Since 2002, according to MRIS, the average price of a home in Baltimore has risen faster than in its suburbs – at a time when the number of city home sales jumped by a fifth.
“We’ve always known Baltimore City life was a great deal,” said Tracy Gosson, executive director of Live Baltimore, an independent nonprofit organization founded in 1997 to market the city. “Now we can say it’s a great value. … I don’t care how much somebody loves a neighborhood; if they think they’re going to lose money, they’re not going to buy.”
Baltimore in the 1990s was caught in the throes of what housing advocate Charlie Duff called its worst real estate decade since the Depression. Even five years ago, the city had only islands of prosperity. Now housing experts see a significant and hopeful change.
“The good neighborhoods are starting to grow together,” said Duff, president of Jubilee Baltimore Inc., a nonprofit housing and community development organization.
Key trends
A Sun analysis of MRIS home sales data found several key trends:
The ZIP codes that saw the biggest jumps in price between 1999 and last year were clustered around the harbor – the ones that include Fells Point and Canton. Both areas are up more than 140 percent, not including the parts that reach beyond the city. But the neighborhoods next-door, with no water in sight, are feeling considerable ripple effects – Patterson Park being just one example.
“The areas further away are becoming very attractive to people who … have a lot of money,” said Barry R. Glazer, a broker for Century 21 Downtown.
The average home sold in the 21211 ZIP code more than doubled in price between 1999 and last year, which makes it one of the 10 fastest-appreciating communities in the region. And with an average price of $136,500, it’s the most affordable place on that list.
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The success of Hampden and nearby neighborhoods such as Medfield is partly about proximity to pricier North Baltimore places – Guilford and Roland Park, for instance. But it’s also about Hampden itself, a place known for its “Miracle on 34th Street” Christmas displays, its Bawlmer style and its quirky merchants, who make up a thriving retail area called The Avenue.
“It shows the importance of having available retail amenities,” said Anirban Basu, chief executive officer of Sage Policy Group, an economic and policy consulting firm in Baltimore. “Hampden, because of its Avenue, is viewed differently – is viewed as having a focal point.”
The area that includes Penn Station – 21202, which includes parts of Mount Vernon and downtown – saw prices rise nearly 85 percent as District workers have discovered that they can be in Washington in an hour without the headaches of Beltway traffic. Live Baltimore’s neighborhood-level statistics suggest even better appreciation for nearby Reservoir Hill and Charles Village, to the north.
Tim Page, 50, classical music critic for The Washington Post, bought a huge painted-lady rowhouse in Charles Village for $313,000 last summer shortly after the owner put up a “For Sale” sign.
“She didn’t bring in the sign for a little bit, and she got a whole ton of calls from people – and almost all of them were from Washington,” said Page, who figures his house would be worth $1 million to $2 million there.
The ZIP code that includes Belair-Edison and part of the planned East Baltimore redevelopment project near the Johns Hopkins medical complex – 21213 – barely budged, up about 4 percent, MRIS numbers show.
The city side of Curtis Bay also did relatively poorly despite its waterfront location, rising about 14 percent.
The Edmondson Village and Arlington ZIP codes in West Baltimore rose 14.7 percent and 17.1 percent, respectively, not counting the parts that cross into the county. And Walbrook between them – bisected by crime-ridden North Avenue – rose 9.5 percent.
Signs of problems
The Johns Hopkins University’s Institute for Policy Studies found more signs of problems: When all transactions are tallied, including for-sale-by-owners, two ZIP codes saw average prices drop between 1999 and early November 2004, the most recent data available.
The area that includes Madison-Eastend – 21205, the other section of the East Baltimore redevelopment project – was down by 25 percent.
In Southwest Baltimore, prices in 21223 – including Franklin Square and Penrose – were down 2 percent, according to the Hopkins institute. Both ZIP codes are in high-crime areas.
Adjust for the value-eroding effects of inflation, and more than a quarter of the city’s ZIP codes saw a drop in prices during that period, the institute found.
“The areas that started low … typically lost value,” said Sandra J. Newman, director of the Johns Hopkins institute. “It was the neighborhoods that had already attained some quality that continued to become healthier.”
There are stable, even trendy neighborhoods in the city’s troubled ZIP codes – Ashburton, for example – that are seeing values escalate strongly. There also are swaths of vacancies and despair. More than 15,700 city homes sit empty, and low interest rates can’t begin to address the problems on the boarded-up blocks where abandonment reigns.
Poverty, crime and drug addiction are part of the cause. Illegal flipping in the 1990s also left a lasting mark. Before the state cracked down on the practice, some investors, appraisers and other real estate professionals conspired to trick people into buying overvalued property with minimal improvements – homes the new owners frequently lost to foreclosure or simply abandoned.
Baltimore continues to struggle with problems that can encourage people to leave, including some of the nation’s highest homicide and heroin-addiction rates, and a school system that has flirted with bankruptcy. The city “is doing some of the right things, but it takes a long time for those results to translate into comfort,” said Charles M. Christian, professor of population geography at the University of Maryland, College Park.
“I’ve heard any number of people say, ‘Boy, I’d sure like to move back into the city; the price of homes is right … but damn it, I just can’t deal with the crime,'” he said.
‘City is on the verge’
Duff thinks this is a critical moment for Baltimore: Can it use the boom as a jump-start and keep going when the market changes?
“Part of the city is on the verge of success,” he said, “and part of it is on the verge of failure.”
Mayor Martin O’Malley argues that the new appreciation for city real estate is a sign that people are seeing improvements.
Though homicides are continuing at a steady clip, the O’Malley administration says overall violent crime decreased 40 percent between 1999 and 2003 – the biggest drop among big cities.
And city housing officials – fighting vacancies with new programs to track down owners, seize homes and more quickly turn them around to buyers – say there’s evidence of a rebound.
“Some of the areas have seen some challenges, and they’re actually beginning to turn the corner, like Belair-Edison,” said city Housing Commissioner Paul T. Graziano.
That east-side community was pummeled by illegal flipping in the 1990s. Now it’s attracting civil servants because teachers and police officers can get deep discounts on homes seized by the U.S. Department of Housing and Urban Development, said Diana L. Ratcliff of the nonprofit Belair-Edison Neighborhoods Inc. They’re buying properties that are falling apart and reviving them, she said.
Without the effect of the discounted HUD homes, sales prices in the community are up significantly in the past few years, Ratcliff said.
‘Hammering away’
George W. Johnson III was thinking of moving his family from Ashburton to Charles Village before he discovered in 2003 that his teaching job at Polytechnic Institute made him eligible to buy a half-off HUD home in Belair-Edison. So he did – spending about $30,000 on the purchase and $40,000 on the rehabilitation. He expects to move in any day now, just as soon as he finishes the work.
“I thought it was a good investment,” said Johnson, 39, a father of two. He’s delighted with the three-bedroom home, which sits in a long block of neat brick rowhouses across from Herring Run Park. And though thieves broke in last month and stole $1,000 worth of tools, he still believes in the area – he’s just secured his property better.
“It seems like a neighborhood in transition … a lot of young couples, a good variety, and everybody’s hammering away and fixing up,” he said.
Spike in rehabbing
Rehabbing has spiked across the city. Homeowners and investors worked on about 17,500 residential properties in fiscal 2004, a 40 percent increase from fiscal 2002, according to the housing department.
Jennifer Carter Jones, 32, who recently moved into a home she and her husband renovated in Seton Hill, said that crime is still “out of control” but that she thinks the city is moving in the right direction. It amazes her that home prices have increased more than 60 percent between 1999 and last year in her west-side ZIP code.
“I’m really glad that people are seeing something about Baltimore other than crime,” said Jones, an attorney who grew up in Reservoir Hill.
The city is trying to ensure that people see something other than abandonment as well.
Baltimore’s housing department has acquired more than 5,200 abandoned homes since it began “Project 5000” three years ago to get a handle on the vacancy problem. The city is focusing on blocks that officials think can be tipped into vibrancy.
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Housing officials hired six private investigators last year to track down the owners of other abandoned homes on what they call tippable blocks so they’re brought up to code – or sold.
And the city is planning some large new-home projects, including 1,100 units in a single development in West Baltimore. It comes as building limits in suburban jurisdictions aim to curb sprawl.
“We’ve fundamentally changed the way we go about redeveloping and growing the city,” O’Malley said. “With it becoming harder and harder to build in outlying areas, we’re well-poised. Lord knows, we’ve got room to grow.”
Ripple effects
For Patterson Park, redevelopment efforts by a nonprofit organization helped turn around the neighborhood.
Patterson Park slid from stable blue-collar community to one struggling with drugs, flipping and boarded-up homes in the 1990s. In 1996, determined to stop the downward spiral, then-resident Ed Rutkowski started the Patterson Park Community Development Corp. to buy and rehab those vacant properties in large numbers.
Residents organized another nonprofit shortly afterward to clean up the park, 137 acres that were a deterrent to home buying because they were dangerous and poorly maintained.
When Canton heated up to the south, the community was in position to reap the ripple effects. Prices immediately around the park quadrupled to an average of $220,000 between 1999 and the first half of last year, according to Live Baltimore’s most recent numbers. Sale prices farther north nearly doubled to almost $100,000.
The community development corporation’s renovated homes start at $200,000. More than half their buyers are coming from outside the city, including the Washington area.
“We’re in a position now where we’re not begging people to move here,” said Kaminsky, the sales manager.
As chairwoman of the neighborhood welcoming committee, Ginny Dobry stays busy. She and her helpers take a gift, usually home-baked, to every new resident – more than 70 in the past year and a half.
It’s a sign of change, and “it’s just so wonderful,” Dobry said. She’s lived in the area her entire life and in her near-the-park rowhouse since 1956, so she has seen times when people were leaving at the pace that they’re now coming in.
“Some of these areas were considered demilitarized zones not three years ago, when you’d go into a block and 70 percent of these places were boarded up,” said Tim Almaguer, project coordinator with the nonprofit Friends of Patterson Park Inc. “Now they’re being taken over and fixed up.”
He used to rent in the neighborhood. When he was ready to buy last summer, though, he moved to Gardenville in Northeast Baltimore.
He didn’t particularly want to leave Patterson Park. He didn’t have much choice.
“As I’ve worked to help the park get better,” he said with a rueful laugh, “I turn around, [and] I can’t afford to stay here.”
<!– ART CREDITKENNETH K. LAM : SUN STAFF
ART CREDIT–> <!– CUTLINE TEXTDahlia Kaminsky, sales and marketing manager for the nonprofit Patterson Park Community Development Corp., takes a call from a real estate agent on the second floor of a Streeper Street rowhouse the group is rehabbing.
CUTLINE TEXT–> <!– ART CREDITBARBARA HADDOCK TAYLOR : SUN STAFF PHOTOS
ART CREDIT–> <!– CUTLINE TEXTGeorge W. Johnson III, 39, works on the kitchen floor of his new three-bedroom home in Belair-Edison. As a teacher, Johnson was eligible for a deep discount on the HUD home, and spent about $30,000 on the purchase and $40,000 on the rehabilitation.
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ART CREDIT–> <!– CUTLINE TEXTThe Avenue, Hampden’s thriving retail area, gives the North Baltimore neighborhood its focal point. With an average price of $136,500, Hampden, known for its Bawlmer style, is the most affordable place on the list of the 10 fastest-appreciating communities in the region.
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