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Judging by the number of cranes towering across the city skyline and the number of sales, Baltimore condominiums became a rather popular investment for developers, homebuyers as well as speculators last year. Some industry watchers expect the market to calm down. However others were so impressed by the outpouring of interest that they think it deserves a closer look. A Virginia-based real estate research firm, Delta Associates, issued its first analysis of the market of Baltimore's condominiums last month. The company has been studying the Washington condominium market for years.

There has been increased activity in Baltimore condominiums, and we think now is the time to include it in our report, said William Rich, an analyst with Delta Associates. It's like a snapshot, pretty much, of what's going on. The company last month issued its first-quarter 2006 mid-Atlantic condominium and apartment report, with a section specifically dedicated to the Baltimore condominiums market. For the purposes of the report, the Baltimore area includes the city, in addition to Anne Arundel, Baltimore, Harford and Howard counties. Of the 484 new Baltimore condominium sales in last year, 45 percent were sold in the city, according to the report. Condominium re-sales were garnering huge price inflation during the first half of last year, with the median resold condominium rising in value by nearly 26 percent in the city. That number plunged during the second half of last year to 6 percent ( a telling sign of a leveling market), according to the report.

In Baltimore and Harford counties, the price increase for re-sales during the first half of 2005 was about 24 percent. That number took a nose dive to about 3 percent throughout the second half of the year. In Anne Arundel and Howard, re-sales brought 18 percent more during the first six months of 2005 however, merely 6 percent by the second half of the year. Baltimore City's price increases surpassed Washington's, which saw only a 12 percent re-sale return during the first half of 2005, and only 3 percent during the second half of the year. That can be credited to the relatively small supply of Baltimore condominiums compared to Washington, and the relatively new demand, Rich said. Prices in Baltimore are going to taper off in the years to come, he said. There are also some emerging parallels between the Baltimore condominiums and the Washington condominium markets. They're so near each other in geography that you are starting to see some resemblance in how they're acting in the condominium market, Rich said.

The relationship between the number of units in the Baltimore market that are currently available and sales velocity mirrors Washington, he said. With its present supply and demand curve, Baltimore has about 2.3 years of condominium supply, on the other hand Washington has about 2.7 years. That is considered relatively tight supply, Rich said. Meaning that prices in both markets will likely inch up. Both markets are also somewhat insulated from dramatic downturns in value, he said. In Baltimore, condominium developers have started offering incentives more often than before, according to residential brokers interviewed by The Daily Record. Such incentives can range from freebees, like free electronic equipment, to closing-cost assistance. There's no urgency to buy, said Joe Craig, a broker in the Federal Hill office of Long & Foster Real Estate. It's not like a year ago. Sales are just going to be slower, he said. I mean, that had to happen