Rising home prices in South Baltimore attract builders

Daily Record, The (Baltimore), Mar 21, 2005 by Jen DeGregorio

With asking prices between $500,000 to $600,000 for a three- bedroom townhouse, Pulte Homes expects to fetch all-time highs for homes in South Baltimore's Locust Point neighborhood.

The highest sale before that in Locust Point was $475,000, said Steven Murphy, a Realtor with Long & Foster. [Pulte] is definitely raising the bar.

But to those familiar with Baltimore real estate trends - and the real estate mantra, waterfront is golden - prices in the Michigan- based home builder's McHenry Pointe project are less than shocking. Pulte, which has never built in the city before, began selling homes in the yet-to-be-built neighborhood Saturday.

Locust Point, a community of chiefly rowhomes, is among the latest, predominantly blue collar, Baltimore neighborhoods being jolted awake by an obsession with building near the water; an obsession that has some consumers spending millions downtown on Ritz Carlton condominiums under construction at the Inner Harbor.

The renewed interest in Locust Point began five years ago, when Baltimore developer Struever Bros. Eccles & Rouse turned a former Procter & Gamble soap factory into an office complex called Tide Point.

About a year later, Struever Bros. built a 36-home development in Locust Point called Whetstone Point, with some of those houses selling near the $475,000 mark, Murphy said.

Struever got everyone thinking about taking a look at Locust Point, said Patrick Turner, owner of Henrietta Corp. and developer of Silo Pointe, a project that encompasses the 121 Pulte townhouses as well as condominiums proposed for construction inside an old grain elevator.

Since then, Locust Point home prices have risen dramatically.

In 2000, the average home in Locust Point sold for about $76,800, according to statistics from Live Baltimore, a nonprofit organization that promotes city living. That price increased to about $194,300 in 2004, according to Live Baltimore data, although Murphy said that he would place the figure closer to $205,000.

Another 60 to 80 homes in two separate Locust Point developments are planned in the next few years, Murphy added. Turner said Perry Hall's Ruppert Homes Inc. is behind one of the projects.

So while the half-million dollar price tags for the Pulte homes might have seemed outrageous a few years ago, they exemplify the evolution of housing prices in the neighborhood, and the city at large.

The first set of townhouses at McHenry Pointe will be completed in four months, Pulte officials said, and the total project will be done in about a year and a half.

The condominiums in the grain elevator, which are still in planning stages, will likely be completed by late 2006 or early 2007, Turner said.

Although Pulte Homes just began accepting applications Saturday, about 300 prospective buyers confirmed attendance at Saturday's groundbreaking ceremony, said Debby Coughlan, strategic marketing director for Pulte Homes Maryland.

Pulte has also had many phone inquiries, Coughlan said, and she is certain it will have no problem selling the townhouses.

A significant portion of those phone calls were from Washingtonians.

We expect potentially 10 percent of buyers to be Washington commuters, Coughlan said.

As the supply of housing in the Washington metropolitan area becomes more limited, this is a great opportunity to serve the folks that do live in Washington, D.C., said Michael McCann, the land acquisition manager for Pulte Homes Maryland.

Tracy Gosson, director of Live Baltimore, isn't surprised at the prospect of Washingtonians migrating to Baltimore. Her group spent $75,000 on an advertising campaign to lure Washington residents to Charm City.

The advertisements are working well, she said. Twenty-five percent of the people who walk through [Live Baltimore's] door have D.C. zip codes.

Obvious benefits of moving to Baltimore, such as homes that are 70 percent cheaper on average, have helped the campaign's success, Gosson said.

And who doesn't want to live over there on the water, hop on your water taxi and go to work downtown? she said.