A ‘miserable process’: Baltimore’s scalding housing market prompts first-time homebuyers to go to extremes to get moved in

Erica Gains and her husband were in a bind. The two federal employees and their two young children found out they needed to move from their rental home in Arizona to Maryland — in the middle of a pandemic, during a period of historic inflation and in one of the craziest, most competitive housing markets in decades. Plus, interest rates were about to rise.

Gains, 36, would not recommend what followed their learning in January that they needed to relocate, calling it a “miserable process.”


The Baltimore region’s housing market has been scalding in recent years, juiced up by historically low interest rates and soaring, pandemic-induced demand. Homes for sale are scarce, and those on the market often receive multiple bids and sell within days.

That’s made buying a home all the more difficult for first-time buyers. Wealthy homebuyers and investors are outbidding middle-class homebuyers, who are in turn outbidding first-time buyers, who are being boxed out, said Tom Coale, a Howard County attorney and board member of the Baltimore Regional Housing Partnership.


“This has created this top-down cascade that has made all levels of housing more expensive,” Coale said. “This is a holistic market. … We’re all participating in the same market.”

The median regional home price was $360,000 in April, up more than 9% from a year earlier, according to data from Bright MLS, the region’s listing service. Compared to five years ago, that median sales price is up more than $100,000.

Because they were on a tight timeline, Gains and her husband toured houses via FaceTime.

They put in offers on two houses and were among the dozen or so losing bidders. Gains realized they needed to compromise further on things that once seemed unthinkable. That meant waiving home inspections, agreeing to pay closing costs and shelling out tens of thousands of dollars in cash to cover the appraisal gap — that’s when a home sells for more than what an appraiser deems it’s worth.

Gains said they were preparing to pull about $40,000 from her husband’s 401(k) retirement account when a relative stepped in to help.

Other first-time buyers interviewed by The Baltimore Sun had less torturous journeys to homeownership, but Gains’ experience wasn’t unique.

At the moment, cash is not just the king in Baltimore’s housing market. It is the emperor. Having cash to pay not only the down payment but also closing costs or to cover an appraisal gap is making or breaking many deals in the area, experts said.

“I’ve seen more cash offers this year than any other year,” said Christina Elliott, a real estate agent with Keller Williams in Ellicott City.


That’s partly because of cash investors, Elliott said. But traditional buyers also are getting cash loans from family members or dipping into retirement savings.

“There is so much cash flowing in our area,” said real estate agent Tina Beliveau of eXp Realty in Timonium.

Beliveau said she too has never seen so many cash transactions. They’ve included purchases in which buyers said it didn’t matter what a house appraised for — they’d cover the appraisal gap regardless.

“Some buyers just don’t have the money to compete that way,” she said.

It is often not enough to waive home inspections, Beliveau said. Buyers must be more creative and aggressive to make their offers stand out. She recently bought a vacation home in South Carolina herself and sweetened the deal with a $1,000 “thank-you bonus” for the seller via Venmo when the home went under contract.

On one Baltimore County home, it was so hard to keep up with the offers that real estate agent Leah Knoerlein made a spreadsheet for the seller after the number reached 19.


“I’ve been doing this since ‘78,” said Knoerlein of LT Realty in Nottingham. “Even back before the bubble burst in ‘07 and ‘08, I didn’t see those numbers of offers coming in on listings. I was just amazed.”

Demand has tapered in recent months, Knoerlein said, explaining that some buyers are opting to leave the market as interest rates rise and inflation reduces their buying power.

Chuck Cooper, a senior loan officer at 1st Preference Mortgage in Baltimore, said the recent rise in interest rates from 3% to about 5.5% might seem small, but it can have a huge impact on a monthly budget. It could mean paying $300 more per month on a typical mortgage for a $200,000 home, Cooper said. That’s enough to keep some people renting or living with family, he said.

A rising interest rate will cool the market, Coale said, but it won’t solve the long-term problem of availability. Traditionally, a healthy housing market has enough homes for sale to sustain the market for six months. Bright MLS estimated the Baltimore region has less than a month’s worth of housing supply. As a result, homes are on the market for a median of just six days before selling.

Coale blames the shortage on municipal “anti-housing” rules that restrict new construction.

“We’re just not building enough homes,” Coale said.


But even in such an unusual housing market, buying that first home can be more financially attractive than renting an apartment. According to Apartment List, an online rental marketplace, median monthly rents in Baltimore and surrounding cities have risen about 10% or more in the past year, matching the increase in home prices.

Ariel Stuart, 24, said her parents kept telling her that monthly rent and mortgage payments in the Baltimore area would be about the same, but she was wary of buying. Stuart said she racked up about $30,000 in student loan debt earning a computer information systems degree and thought there was no way she could afford to take on more debt.

Then she met real estate agent Keith Patillo of Samson Properties in Baltimore County, who told her about the Maryland SmartBuy Program, which provides up to $30,000 to homebuyers with existing student debt.

Stuart said she started looking at homes in September and put in an offer on a house in December. The deal fell through because the owner hadn’t paid their homeowner’s association fees.

“It was a really bad day. I got really discouraged,” Stuart said.

She decided to keep looking, but it felt increasingly competitive in January.


“That’s when the market changed,” she said. “Literally every open house that I went to, they were full.”

Stuart said she lost out on about six offers before closing in March on a two-bedroom townhouse near Security Square Mall in Baltimore County. She paid $218,000, right in the range she was looking for. She bought the home as is and said it needs a few renovations.

Laura Darmody lost nine houses before finding a home in March.

“It’s been insane,” said Darmody, who first started looking in November 2020. “This was my 10th offer and finally got something. I am excited, but it’s just been so emotional. Every single offer that I didn’t get takes joy out of something that should be exciting. … It just kills you each time.”

Darmody, 29, is a marketing manager for an alcohol distribution company. She wanted to move out of her parents’ home and get her own. Darmody said she wasn’t picky — her only requirement was a fireplace — but it took nearly a year and a half to close on a deal.

She said her initial real estate agent was great, but after eight failed bids, she went with a new agent, Elliott, who encouraged her to be more creative. Darmody said she “bit the bullet,” went over the asking price and got a home in Arbutus — with a fireplace — for $410,000.


“You’re not competitive unless you’re waiving everything and offering $30,000 above the asking price,” she said.

Darmody said she hopes to move in before she turns 30 later this month.

“This will be the most expensive birthday gift I ever bought myself,” she said.

Samantha Pomplon was the only first-time homebuyer interviewed by The Sun who described buying her first home as “fun.”

The 32-year-old teacher had been saving money for a house and started looking in September in Baltimore. She needed a yard for her dog, Charlie, a shepherd mix. Pomplon wanted to be near a park and in walking distance to restaurants and bars.

After looking in Hampden in North Baltimore, she switched in December to Locust Point in South Baltimore at a friend’s recommendation. She looked for homes between $250,000 and $300,000. Pomplon lost two offers and thought she had lost her third to another buyer when that deal suddenly fell through. She talked to her agent and quickly put in another offer.


“It empowered me to be a bit more assertive with my second offer” on that home, she said.

In the end, the appraised value came back lower than her offer, and Pomplon paid less for the house.

“For me, this was something I had been dreading in a way,” said Pomplon, noting how many people told her it would be stressful. “It ended up being, dare I say, fun.”

Kiki Oosterwijk, 28, had been planning to buy a home since graduating from college. She moved in with her parents to save money, but when the coronavirus pandemic hit in 2020, she and her mother were both working from home. Oosterwijk decided it was time to find her own place.

She wanted something move-in ready and modern. She doesn’t have pets and didn’t want a lot of yard space. Oosterwijk preferred an open floor plan and an end-unit townhome that was close to family in Baltimore County.

Her agent, James Weiskerger of the W Home Group in Timonium, was a longtime family friend, Oosterwijk said. He texted her in December 2020 about the “perfect” home in Hunt Valley. Oosterwijk said she rode her bike to the house that day then brought her parents to see it. Weiskerger represented both Oosterwijk and the seller, so the home was never listed, she said, which meant there was no bidding war.

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Oosterwijk, a vice president at a boutique investment bank in Sparks, said her ceiling was $450,000. She bought the home for $400,000. Other than being in the middle of the block, the townhome had pretty much everything Oosterwijk wanted, she said.

What made the sale possible was flexibility, Oosterwijk said. The sellers were building a house out of state and needed a buyer who didn’t need to move in right away. That was perfect for Oosterwijk, who was living with her parents. They went under contract in December 2020, and Oosterwijk waited about five months to move in.

“The stars just aligned with the timing,” she said.

As for Gains, she and her family are settling into their home in Perry Hall, which feels quaint compared to the sprawl of Phoenix. They’re looking forward to experiencing all the seasons and seeing animals that aren’t venomous.

She’s found things she couldn’t see in the FaceTime tour of the home, like melted crayons in the carpet. But Gains said she’s glad to have her first home, even if it cost $700,000.

They agreed to let the seller live in the home, rent free, for an additional two weeks, Gains said, but they also got to lock in their interest rate at about 3.5%. Anything higher could’ve sunk their deal.


“I think we made out really well,” Gains said. “We truly lucked out.”