Average home prices in Cincinnati are up for the 20th straight month, with single-family homes in Cincinnati selling faster than any other market in the country except one. The strong demand for housing in Cincinnati is likely one reason why the market is becoming a city for renters, with more than 50% of the households renting instead of owning.
Nestled along the banks of the Ohio River, the Cincinnati metro area spans portions of three states while offering a homerun opportunity for real estate investors that’s nearly as big as the city itself.
Cincinnati is the largest city in Ohio and was also recognized by Cincinnati.com as having the fastest growing economy in the Midwest. In fact, over the next 10 years, the workforce is projected to increase by more than 6%.
Nicknamed the “Queen City of the West,” Cincinnati is home to three pro sports teams and one of the largest economies in the Midwest. Back in 1869 it was the first city to have a professional baseball team – the Cincinnati Red Stockings, now known as the Cincinnati Reds.
Here’s why Cincinnati still offers attractive opportunities for real estate investors in 2021 and beyond.
Cincinnati’s population has been steadily increasing over the past 10 years. City officials credit the government’s pro-growth policies for the area’s growing population and the resurgence of the urban core.
Key Population Stats:
- Cincinnati is home to just over 300,000 people in the city and more than 2.2 million residents in the metropolitan area.
- Greater Cincinnati spans across three states: Ohio, Indiana, and Kentucky.
- The Cincinnati metro area includes 15 counties in Southwest Ohio, Northern Kentucky, and Southeast Indiana.
- Population in Cincinnati increased by 0.4% year over year and grew by 3% between 2010 and 2017.
- Median age in Cincinnati is 38 years, with 26% of the population between the ages of 20 and 39.
As the economy in Cincinnati begins to recover, the BLS reports that job sectors showing the quickest signs of rebounding include construction, trade and transportation, education and health services, and professional and business services.
Over the next 10 years, well-paying healthcare jobs are expected to be the fastest-growing segment of the job market in the Cincinnati metro area. The city continues to seek ways to increase opportunities for lower-wage and entry-level workers in the region, creating a potential boon for rental property investors.
Unemployment in Cincinnati down to only 5.1% (Oct. 2020). Wages are historically rising for some of the most highly-skilled workers including engineers, doctors, and software developers, according to Cincinnati.com. The Cleveland Fed echoes those findings, noting that hiring firms continue to struggle to find suitably skilled workers to fill open positions.
Key Employment Stats:
- GDP of Cincinnati is over $153.9 billion and has grown by nearly 54% over the past 10 years.
- Employment growth in Cincinnati is 1.12% year-over-year, with median household incomes rising by 1.77% over the same time period.
- Unemployment in Cincinnati is currently 5.1% (October 2020).
- All employment sectors have seen job gains over the past couple of years, with the leisure and hospitality, trade and transportation, professional and business services, and manufacturing segments witnessing the most robust growth.
- Net migration into Cincinnati recently surpassed 1,000 last year, with new residents attracted by a cost of living in the Cincinnati metro area that’s 9% below the national average.
- Cincinnati’s economy is the 7th-largest in the Midwest, just behind major metropolitan hubs like Chicago, St. Louis, and Minneapolis.
- Fortune 500 companies headquartered in Cincinnati include Procter & Gamble, The Kroger Company, and Macy’s, while General Electric’s Global Operations Center is headquartered in downtown Cincinnati.
- The two largest local employers in Cincinnati are The Kroger Company with more than 21,000 people and the University of Cincinnati with about 15,000 workers.
- More than 35% of the residents in Cincinnati have a bachelor’s degree or higher, while nearly 92% are high school graduates or higher.
- Cincinnati is within a one-day drive of nearly 50% of the population in the U.S.
- Major interstate routes through Cincinnati include I-71, I-74, and I-75 connecting the metro area to Louisville, Indianapolis, and Columbus.
- Cincinnati/Northern Kentucky International Airport (CVG) handles more than 8.9 million passengers annually, offers direct non-stop service to 38 of the top 40 U.S. markets and Europe, and is home to one of only three DHL Express Super Hubs with more than 1.2 million tons of cargo transiting through the airport last year.
- Three major league sports teams call Cincinnati home: MLB’s Cincinnati Red Sox, NFL’s Cincinnati Bengals, and Major League Soccer’s FC Cincinnati.
- Famous Cincinnatians include Andy Williams, Doris Day, George Clooney (along with mother Rosemary), Sarah Jessica Parker, and Roy Rogers.
Real Estate Market
Cincinnati is one of the three hottest real estate markets in Ohio, according to Forbes. The ranking is based on several key performance metrics, including median sale and list price, days on market, and sales-to-list price ratio.
It’s not only Forbes that thinks the real estate market in Cincinnati is great. WalletHub lists Cincinnati as one of the best real estate markets, based on the same key real estate criteria investors use such as activity in the marketplace, affordability, and economic environment.
Key Market Stats:
- Zillow Home Value Index (ZHVI) for Cincinnati is $182,113 through November 2020.
- Home values in Cincinnati have increased by 11.8% year-over-year and are predicted to grow by another 11.2% over the next 12 months.
- Over the past five years home values in Cincinnati have increased by 48%.
- Median sales price of a home in Cincinnati is $215,000 based on the most recent report from the Cincinnati Area Board of Realtors (CABR).
- Median sales prices for homes in Cincinnati have increased by 17.84% year-over-year.
- Number of homes sold in Cincinnati has grown by 1.88% over the past 12 months.
- Of the 42 neighborhoods in Cincinnati, Mount Lookout is the most expensive with a median listing price of $430,000, according to Realtor.com.
- Most affordable neighborhood for buying a home in Cincinnati is East Price Hill where the median listing price is $104,500.
Strong Renters’ Market
About 25% of the buyers in Cincinnati are from out of state. WCPO in Cincinnati reports that the market offers a “real affordability proposal” and is benefitting from the inbound migration of people from high-cost coastal areas looking for a great quality of life and an affordable place to call home.
Cincinnati is also ranked as one of the best cities for renters by WalletHub. The ranking analyzed key criteria that real estate investors use, including activity in the rental market, affordability compared to household incomes, and overall quality of life.
Key Market Stats:
- Average rent in Cincinnati is $1,036 per month according to RENTCafé (as of Oct. 2020).
- Rents in Cincinnati have increased by 3% year-over-year.
- Over the past three years the average rent in Cincinnati has grown by more than 9%.
- 52% of the rental units in Cincinnati have monthly rents of $1,000 or less.
- Renter-occupied housing units in Cincinnati account for 55% of the occupied housing units in the metropolitan area.
- Most affordable neighborhoods for renters in Cincinnati are Sayler Park, Queensgate, and West End Cincinnati where rents are less than $655 per month.
- Most expensive neighborhoods in Cincinnati for renters include Over-The-Rhine, Pendleton, and Mount Auburn where rents average about $1,600 per month.
Historic Price Changes & Affordability
Real estate investors should also review the affordability and historic price changes of homes in Cincinnati. Affordability is one metric investors use to help decide if a specific market is good for rental property. Short- and long-term historic price changes are one measurement real estate investors can use to help match individual investment strategies to specific cities and neighborhoods.
The Freddie Mac House Price Index (FMHPI) report for the Cincinnati OH-KY-IN MSA reveals:
- October 2015 HPI: 115.23
- October 2020 HPI: 161.58
- 5-year change in home prices: 40.2%
- One-year change in home prices: 11.4%
- Monthly change in home prices: 1.1%.
Kiplinger also analyzes home prices and affordability in the top 100 U.S. markets using information from ATTOM Data Solutions:
- Since the last real estate cycle market peak in May 2006, home prices in Cincinnati have increased by 5.3%.
- Since the last real estate cycle market bottom in March 2012, home prices in Cincinnati have increased by 46.3%.
- Cincinnati has an affordability index of 2 out of 10, meaning the metro area is one of the more affordable places to own a home in the U.S.
Quality of Life
Cincinnati ranks as one of the top 40 best places to live in the U.S. based on quality-of-life metrics including the job market, value of living in Cincinnati, and the desire to live in the area.
Key Quality of Life Stats:
- Forbes ranks Cincinnati as the 44th-best place for business and careers, and among the top 90 places for cost of doing business and education.
- Cincinnati is brimming with cultural amenities, including museums, pro sports teams, and a wide variety of restaurants including Arnold’s Bar and Grill in Downtown Cincinnati, winning awards from Esquire, Thrillist, and The Daily Meal.
- The Cincinnati Skywalk makes it easy to get around downtown in poor weather, the Cincinnati Zoo & Botanical Garden is the second oldest zoo in the nation, and the Cincinnati Masters ATP 1000 Tour is a pro men’s and women’s tennis tournament that traces its beginnings back to 1899.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Cincinnati based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels, and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
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