Housing boom, bust left different effects

A variety of Baltimore neighborhoods ended the roller-coaster ride of the past decade with significantly higher home values than at the start, but some communities saw all the gains of the housing bubble erased by the bust.

That's the conclusion of a group of Johns Hopkins University graduate students who analyzed how the turbulent 2000s affected a mix of low-, moderate- and high-income areas in the city. Two recessions, a financial crisis and a housing run-up followed by collapse did not hit every neighborhood equally.Unemployment and foreclosures rose across the board, but home prices were a different story. Some of the 14 neighborhoods the public-policy students analyzed posted big gains compared with 2000. Some had more modest increases. And two - Belair-Edison and Frankford in Northeast Baltimore - lost ground slightly after accounting for inflation.

"They've gone back to where they were in the beginning," Sandra Newman, a Johns Hopkins professor of policy studies who oversaw the research, said of the two neighborhoods. The research results will be presented today to city leaders.

Newman, director of the university's Center on Housing, Neighborhoods and Communities, assigned the " 'Great Recession' in Baltimore Neighborhoods" project because she thought a close scrutiny of how different parts of the city fared during the "tremendously tumultuous" decade would produce intriguing results.

"Other than the year 2000, there hasn't been a year in which some shock hasn't occurred," she said.

Baltimore ended the decade significantly worse off economically than it started - much like the country as a whole. The city's unemployment rate rose from just over 6 percent at the beginning of 2000 to more than 10 percent at the end of 2009, according to estimates from the U.S. Department of Labor. Citywide, employers cut more than 50,000 jobs.

But home prices rose so rapidly between 2002 and 2006 in Baltimore that later drops reversed only part of the increase citywide.

That makes the experience of home sellers in Belair-Edison and Frankford all the more dramatic.

The neighboring areas, full of rowhomes and some single-family houses with moderate-income families, both had big run-ups in value during the boom years. By 2009, though, Belair-Edison's median price had fallen to about $60,000 - a nearly 40 percent decline from its peak and just under the typical price in 2000, adjusting for inflation. Frankford's $80,000 median price last year was also just below its 2000 starting point after falling nearly 50 percent from its peak, the Johns Hopkins analysis showed.

Both saw substantial increases in foreclosures, which pull down housing values.

"There's no question those two neighborhoods have been hit pretty hard," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors.

The students analyzed all home sales at a census-tract level - not just those listed on the multiple-listing service used by real estate agents - and adjusted the figures for inflation to try to show the real change in value.

As a group, the high-income neighborhoods held onto their housing-bubble price gains best.

Mount Washington, a Northwest Baltimore community with sizable houses, had a median sale price of $300,000 last year, down about $75,000 from the peak but still nearly $120,000 above the median price at the start of the decade.

The waterfront community of Canton, which saw a boom in rehabbing in the middle of the decade, finished with a median price of $250,000. That was down about $50,000 from the peak but still up by $100,000 from 2000, according to the analysis.

But it was Wilson Park, a low-income neighborhood just east of tony Guilford, where prices increased the most. Its $70,000 median price at the end of the decade was nearly twice as high as the median in 2000, barely falling after the boom busted, the findings show.

The area has a history of stability, said Drew Zachary, one of the graduate students involved in the research. Wilson Park's core of long-term residents "are very attached to the neighborhood, very proud of it," said Amy-Lynn Matthews, another student researcher.

Matthews was struck by the big differences in price changes from one neighborhood to the next.

"Everybody did see an increase of some sort during the bubble," she said. "It is interesting that there is quite a bit of variation in what happened after that."



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