Q2 2012 Baltimore, Maryland Commercial Real Estate Economy

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Q2 2012 Baltimore, Maryland Commercial Real Estate Economy

The improvement of the Baltimore area economy nearly stalled as of mid-2012, with employment only slightly higher and unemployment just slightly lower than a year earlier. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm wage and salary employment was just 2,800 jobs (0.2%) higher in June 2012 than it had been in June 2011, a slowdown from the larger year-over-year gains seen earlier. Private employment added a mere 900 jobs (0.1%) during the period, despite a strong gain of 6,800 jobs (3.5%) in the Professional and Business Services sector, a lack of additional losses in the also office-based Financial Activities sector, and an increase of 5,100 jobs (2.1%) in the Education and Health Services sector, anchored locally by Johns Hopkins University and other major institutions. Household-based data from the BLS on the number of employed residents of the Metropolitan Statistical Area (MSA) also shows a modest increase of about 7,000 (0.5%) year-over-year. This figure includes the self-employed and commuters to the Washington, D.C. MSA to the south.

Strong jobs gains, or at least an absence of loss, in several of the metro area’s key white collar sectors was offset by weakness in the industrial and consumer-driven sectors. CES data reports year-over-year employment losses of 400 jobs (0.6%) in Construction and related sectors, 2,700 (4.3%) in Manufacturing, 3,600 (6.9%) in Wholesale Trade and 3,800 (10.1%) in Transportation and Warehousing. The sharp employment decreases in the distribution-oriented Wholesale and Transportation and Warehousing sectors are a surprise, as growth in logistics had been expected to result from local military expansion as part of the Base Realignment and Closure (BRAC) process.

Meanwhile, the Leisure and Hospitality sector lost 1,500 jobs (1.2%) and the Retail Trade sector lost 800 (0.6%). Population growth is half the U.S. average here according to Moody’s Economy.com, with a gain of 16,280 (0.6%) in 2012 forecast to be followed by increases of about 14,700 (0.5%) per year thereafter. Incomes are above average however, and up 2.7% from a year earlier as of second quarter 2012, this source reported. Housing prices are rising according to the National Association of Realtors, with a second quarter median existing home price of $255,000, that is up 8.6% from a year earlier. Though lower than in metro Washington, D.C., at $367,000, it is higher than in Philadelphia at $219,000.