Rising prices, low inventory and a dearth of new construction are fueling a seller’s market in the Baltimore-Washington area that is only going to get worse if Amazon.com Inc. picks Maryland or D.C. for its HQ2, the mid-Atlantic head of Coldwell Banker said Tuesday.
Duff Rubin said some sellers are putting off selling their homes in case Amazon (NASDAQ: AMZN) picks the region for a second headquarters that would employ 50,000 people. Homeowners interested in moving on are biding their time waiting for prices to go up. Amazon is considering 20 locations, including Montgomery County, D.C., and Northern Virginia. No date is set on when the e-commerce giant will make a decision.
"That’s hurting our industry," Rubin, president of Coldwell Banker Residential Brokerage Mid-Atlantic, said of the wait during the Baltimore Business Journal’s Future of Real Estate Event in downtown Baltimore. "It’s really going to create a need for new construction."
Low inventory was a recurring theme for Rubin during a panel discussion that touched on luxury home sales, apartment construction and a burgeoning commercial real estate market. Rubin was joined on the panel by Karen Hubble Bisbee, real estate agent with the Hubble Bisbee Group of Long & Foster/Christie International Real Estate; Bill Castelli, senior vice president of government affairs for the Maryland Realtors; and Daraius Irani, chief economist with the Regional Economic Studies institute at Towson University.
Hubble Bisbee said people — particularly baby boomers — are staying in their homes longer for several reasons. Among them the recent tax reform, rising interest rates and the lack of options to move into. Paying "seductive" interest rates below 4 percent in their existing homes makes it tough to move, she said. Many are opting to create a first-floor bedroom or making other changes that would enable them to stay in their homes.
"The baby boomer generation is aging in place a bit," she said.
Rubin said many developers and home builders in D.C. and Baltimore are catering to a rental market driven by millennials who aren’t quite ready to commit to a place or homeownership. And if they do want to buy, they’re not gravitating toward the McMansions in the suburbs.
Irani said such buyers want the amenities of city life. But for many, crime and poor schools in Baltimore might send them to growing "faux-urban" centers in Columbia, Towson and White Marsh.
Irani pointed to news stories about how some Baltimore schools had no heat during the coldest days of the year. News stories showed kids huddled in coats in the classroom.
"Your kids if they go to school might be cold," Irani said. "People might be tired of this nonsense and move to these faux urban centers. I call them faux because they’re like Disney World."
While the market overall is strong, luxury homes remain sluggish when it comes to sales, Rubin and Hubble Bisbee said.
Rubin said even the high-flying New York luxury market is down 25 percent.
"There’s no shortage of buyers," he said. "They’re just much more price sensitive."
So when you’re talking about luxury homes, you can’t help but bring up Cal Ripken Jr.’s estate in Worthington Valley. The sprawling property — with its own tennis courts, fishing pond and basketball court — goes to auction May 12.
Hubble Bisbee said the home of the baseball legend is rather "wonky" because it was so tailored to Ripken and his lifestyle.
"There are buyers out there," she said. "It will be sold."