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 not only getting bigger, it’s getting better, too. 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 great opportunities for real estate investors in 2020 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 2.1 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 grew 3% between 2010 and 2017, and 1.3% over the past year.
- Cincinnati is within a one-day drive of nearly 50% of the population in the U.S.
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 is nearing its lowest level in decades. Wages are 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 just over $138 billion and has grown at an annualized rate of 1.3%, according to the St. Louis Federal Reserve and the Cleveland Fed.
- Unemployment in Cincinnati is holding steady at 4.2%, with a rate that’s lower than the state of Ohio and slightly higher than the U.S. average.
- Job growth in Cincinnati is 1.3%, with more than 16,400 new jobs added in the metro area through the middle of last year.
- All employment sectors have seen job gains over the past year, with the leisure and hospitality, trade and transportation, professional and business services, and manufacturing segments witnessing the most robust growth.
- Net migration into Cincinnati topped 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 34% of the residents in Cincinnati have a Bachelor’s degree or higher, while nearly 87% are high school, college, and university graduates, according to the U.S. Census Bureau.
- 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
According to the most recent Home Sales Report by the Cincinnati Area Board of Realtors (CABR), Cincinnati ranks #2 as the most affordable place to raise a family.
The robust housing market in Cincinnati remains strong and affordable as well. CBAR President Michelle Billings notes that “low rates, reasonable prices and a constantly moving inventory helps keep Cincinnati very affordable.”
Key Market Stats:
- The median home value in Cincinnati is $147,100 according to Zillow (as of Sept. 2019).
- Home values in Cincinnati increased 7.1% last year and are projected to grow by 3.3% over the next year.
- Median listing prices are $214,000 while median sale prices are $162,500, indicating there’s plenty of room for real estate investors to negotiate with motivated sellers.
- Median list price per square foot is $128, with asking prices historically dipping during the winter season.
- Average days on market is 67.
- Nearly 20% of the home listings in Cincinnati have a price cut during that time.
- 10.6% of the homes in Cincinnati have negative equity vs. 8.2% U.S. average.
- 1.5% of the homes in Cincinnati have a delinquent mortgage vs. 1.1% U.S. average.
- These stats, combined with price cuts and the wide difference between listing and sale price, may indicate a good opportunity for experienced real estate investors in Cincinnati.
Strong Renters’ Market
Rents in Cincinnati are consistently trending upward. In fact, over the last five years average rents have grown by about 30% according to Zillow’s Rent Index.
Key Market Stats:
- Median rent in Cincinnati is $1,280 per month and slightly higher than $1 per square foot.
- Average rents in the greater Cincinnati metro area are nearly $1,380 per month, below the U.S. national monthly average of $1,573.
- According to RENTCafé, average rents in Cincinnati have increased by 3% over the last 12 months.
- Rents are still relatively affordable, with 67% of the rental housing units in the market renting for $1,000 per month or less.
- 54% of the households in Cincinnati are renter-occupied vs. 45% owner-occupied.
- Most affordable neighborhoods for renters in Cincinnati are Queensgate, West End Cincinnati, and Carthage where tenants currently pay about $620 per month in rent.
- Most expensive neighborhoods in Cincinnati for renters include Over-The-Rhine, Pendleton, and Mount Auburn where rents range from just over $1,600 to nearly $1,700 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 prices changes are one measurement real estate investors can use to help match individual investment strategies to specific cities and neighborhoods.
The 2019 Q2 House Price Index report from the FHA notes that:
- Home prices in the Cincinnati metro area have increased nearly 121% since Q1 1991. Over the past 5 years home prices have increased just over 31%, and by 0.79% from the last quarter.
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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