Hot market boosts condos


David and Barbara Kornblatt have had enough with mowing and house repairs. Their children had long been on their own and their six-bedroom house in Pikesville seemed much too big. So they sold the house and bought a large two-bedroom condominium in the yet-to-be-completed Spinnaker Bay in Harbor East.

"We love downtown," said David Kornblatt, 78, a real estate developer who builds offices. "And we wanted to be on one floor."

Less time taking care of the house will mean more time to spend in the city doing the things they love, like going to the symphony or seeing movies at the Charles. The Kornblatts, who expect to move into their apartment in September, are looking forward to the easier lifestyle and can see living in their condo for a long time to come.

The Kornblatts aren't alone: Baltimore is experiencing a condominium boom. New condo developments are opening all over the city - around the Inner Harbor, in Fells Point, in Charles Village, at Clipper Mill near Hampden, even in the suburbs.

"There's more of a demand than there is a supply," said Nadya Workman, a real estate agent for Long & Foster who has sold dozens of condos in the Inner Harbor area and lives in one herself.

The demand for condos is being fueled by the booming real estate market; as prices have continued to rise, buyers see any kind of real estate, including condos, as a good investment.

Another key factor is the revitalization of downtown Baltimore and the waterfront. Many people want to move back down to the city because of the growing number of downtown stores, restaurants, and attractions, said Scott Peterson, vice president and regional operations manager for Bozzuto Homes, which is developing Spinnaker Bay.

Cliff Drozda, director of sales and marketing for the long-delayed Ritz-Carlton Residences on Key Highway, agreed that Baltimore has been an untapped market.

"The reason we thought luxury condos would work in Baltimore is because the city is coming on so strong," said Drozda.

He said that Ritz-Carlton was attracted to Baltimore because waterfront property here is relatively inexpensive compared with other East Coast cities, and people want to live on the water.

"Baltimore," said Drozda, "is a treasure on the East Coast."

Other new condo developments downtown include Struever Bros., Eccles & Rouse's Fells Landing European Flats on Thames Street in Fells Point; the Ritz-Carlton Residences on the waterfront in Federal Hill; and Beazer Homes' Albermarle Square townhouses in Historic Jonestown.

Struever Brothers also is building the Millrace Condos at Clipper Mill in Woodberry, just west of Hampden; two condo buildings in Charles Village; and a condo development in the 1200 block of N. Charles St.

Robert A. Aydukovic, director of residential and economic development for the Downtown Partnership of Baltimore, estimates that about 790 condo units have been built in the city in the last year alone. No condos were built in the 10 years before that, according to Aydukovic.

"There's a lot of momentum right now," said Aydukovic.

Baby boomers are another big factor in the condo boom. With the kids all raised, empty nesters are deciding that they don't need a big house.

"It's appealing to baby boomers who say, 'I don't want to deal with the lawn, and the pool. I just want to show up,'" said Bozzuto's Peterson.

Peterson said Spinnaker Bay is primarily aimed at empty nesters. "They still enjoy life," said Peterson, "and they're familiar with the city and they like the proximity to Fells Point and the business district."

All of the 32 condos in SpinnakerBay are already reserved (the other 316 units in the building are rentals).

The city has come late to the condo trend. "Baltimore is about a decade behind," said David Meachem, regional sales manager for Beazer Homes. "Historically the city has been a very conservative place to live and much slower to accept new concepts."

Condos are a form of ownership in which individuals own a unit (an apartment or townhouse) and have a share in common areas of the property, such as the building and grounds. In Baltimore, however, people have traditionally preferred more concrete kinds of ownership.

"People in Baltimore have felt that they had to have a piece of dirt," said Tim Pula, development director of the Millrace Condos for Struever.

Condo living doesn't come cheap. Prices at Spinnaker Bay range from over $500,000 for a two-bedroom apartment to over $2 million for a large three-bedroom unit with a water view. Condos at the Ritz-Carlton will cost even more. In addition to their mortgage, owners pay a monthly condo fee that covers shared building expenses such as maintenance and parking.

The monthly maintenance fee depends on the size of the condo. The fee for the smallest unit at Spinnaker Bay, a two bedroom, 1,409-square-foot apartment, is $623, while the fee for the largest unit, a 2,000-square-foot plus, three-bedroom penthouse, is $1,556.

At the same time, some developers are marketing condos to first-time homebuyers who can't afford a single-family home.

"In the past," said Struever Bros.' Pula, "these first-time buyers would have typically bought a rowhouse in Fells Point or Hampden, but they have been priced out of that market."

The Millrace Condos are aimed at this market: young professionals, newlyweds and other first-time buyers. That doesn't mean that the condos are a bargain: The one- and two-bedroom apartments range from 660 to 1,450 square feet and will sell for between the low $200,000s to the $400,000s.

Last year, Eric Hochberg, 33, bought a condo - and his first piece of real estate - in Scarlett Place in the Inner Harbor for $321,000 and it has already gone up in value.

Hochberg and his fiancee, Tracy Young, love living downtown. "We walk everywhere from here," said Hochberg, "and there are plenty of restaurants around the corner."

Condos intended for both empty nesters and first-time buyers are also going up in the suburbs. Beazer Homes has just completed a condominium community in Odenton that is limited to people 55 and older. And the company is about to begin work on a development at the Greenspring Quarry on Greenspring Avenue in the county. Bozzuto has also recently completed the River Hill Condominiums in Columbia.

The increasing cost of land is also spurring the rise of condos. To offset more expensive land, developers are building condo communities, which have more units squeezed into smaller space. "The old rule of thumb was that the land was 20-25 percent of the selling price," said Beazer's Meachem. "Now it's approaching 33 percent."

Land is becoming harder to find, a result in part because of restrictions and building moratoriums aimed at limiting sprawl, according to Pula. Condominiums, he says, are a way of using less land, either by building townhouses or high-rises.

The real question is whether the trend will last. Baltimore has gone condo crazy before.

In the late '80s and early '90s, condo developments such as Scarlett Place, Canton Crossing, The Colonnade and HarborView opened with great fanfare. But within just a few years, demand decreased, and many of these buildings' units ended up being rented or auctioned off.

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