Reservoir Hill: It’s time for real estate.

During my initial home search in Baltimore thirteen years ago, Reservoir Hill was described as a neighborhood on the rebound – a transitional neighborhood about to make that final transition.  But then I found articles reporting the same sentiment 20 years earlier.  Reservoir Hill and its sibling, Bolton Hill, are similar in so many ways, but exist on opposite sides of North Avenue.

It’s almost like one went to college and made something of itself, while the other stayed home and languished.  That has changed.  Now it’s more like that aging sibling has finally found its footing.  Of course it didn’t happen overnight.  Enough people have recognized the potential causing it to reach that important tipping point.  Some are investors who are eager to make a profit, while others just want a quiet home in close-knit community.  And that’s the thing about Reservoir Hill: in the last decade it has transformed itself from simply a neighborhood to a community.

One of the main impediments to transformation, is how large the homes are.  It takes a lot capital and perseverance to rehab a three-story building exceeding 3000 square feet.  Most of the homes were built in the early 1900s, and a rehab requires patience, especially when dealing with a bureaucracy that seems mired in the same era.   Another impediment is the ridiculous way property is assessed for tax purposes.

Communities benefit from some sort of non-residential activity.  Restaurants, art galleries, and upscale grocery stores raise property values.  Why else would communities compete for and trumpet the arrival of a new Whole Foods or Harris Teeter.  In Reservoir Hill, Dovecote Cafe seems to be filled with patrons every time I pass by.   It has to be a joy for members of the community to have a wonderful place to nosh that is within walking distance.   Dovecote’s owner took a chance when she opened her cafe, but so have many others when they bought there.

Not far behind Dovecote Cafe is the Tune-Up City space on Whitelock Street.  Once it’s totally rehabbed (sometime in late 2016), the developers intend to lease to a Bun Shop/Cafe on the first floor and an art gallery upstairs.  They’re also looking for something unique to open in other spaces in this huge warehouse-like structure.

I can’t predict the future, but I can spot trends.  In 2014, forty-nine homes sold in Reservoir Hill; in 2015 it was sixty-three.  As of May 13^th this year, thirty homes have sold.  Twenty-three had sold in the same period last year.  If the current trend holds, this year I expect almost eighty home sales in Reservoir Hill.  In fact, in almost every category an investor would rely, the numbers are better in Reservoir Hill than Bolton Hill.  While Bolton Hill is certainly more expensive, its average sales price has dropped in the last year while the average sale price in Reservoir Hill has gone up.  Days on the market have decreased 42% from last year compared to Bolton Hill’s 23.1%.[i]   Since 2012, only about one house a year manages to sell above $400K in Reservoir Hill, however, I think that’s about change.   There were 346 renovation permits issued for Reservoir Hill in 2015, compared with 274 for Bolton Hill.[ii]  But of course, numbers alone are not enough to prove my point.  You need to see and feel a place to get true indication of the direction a neighborhood is turning.  Reservoir Hill has a relaxed energy that appears to be steadily building.

Developers and individuals are rehabbing homes with increased frequency, even commercial establishments are even sticking a toe in.  Early-adopters are benefiting from this increased focus on the area.  Why now?  Is it because of the perseverance of the true believers?  Is it the influx of millennials who see the large architecturally grandiose townhomes as bargains?  Maybe it’s the confluence of both. Maybe it’s just time.                                                                                                                  

I’m Greg Bridges with Long & Foster.  I sell and write about real estate in and around Baltimore. Office 410-889-9800, Mobile 410-215-0565or g.bridges@lnf.com

[i] Real Estate Business Intelligence (RBI)

[ii] City Renovation Permits