Ron Smith commentator WBAL

The real estate boom is making a lot of folks rich (at least on paper), and as prices for homes skyrocket, governments, local and state, are benefiting big time from escalating property tax revenues.



Remember when Maryland was facing a disastrous shortfall in what it extorts from its citizens? No longer. The state is flush, baby, flush.



Last Wednesday, the Wall Street Journal chose to focus on Baltimore as an example of how the housing boom is beginning to “transform distressed cities.” (Read the article here)



The Journal piece, you’ll notice, is filled with complimentary references to Mayor Martin O’Malley, who is pictured as presiding over “a small victory for Baltimore as the city recovers from one of the nation’s most relentless urban declines.”



According to the article, speculators are flocking to Baltimore from as far away as the west coast in search of relative bargain prices on houses they can either “flip,” or renovate, or collect rents on.



One of the factors that’s key to the housing boom here is the city’s proximity to Washington, where prices are triple what they are in Baltimore. What’s a 45-minute commute by train when one can find such bargains?



How long this boom lasts is anyone’s guess. There are lots of warnings, like this, about the prospects of this particular investment bubble bursting sooner rather than later.



But one group is clearly a winner here: local landlords who are “unloading their properties on eager newcomers.” The Wall Street Journal article mentions the hope that the new landlords will be better stewards of their properties than the old ones, often disparagingly (and accurately) described as slumlords.



This is an optimistic time for the players in residential real estate, and for the government, both of whom are raking in windfall profits. The question now is who will be left without a chair when the music stops.