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The Gibler Team

5 Reason Why Cincinnati Attractive to Real Estate Investors in 2021

Cincinnati’s average house prices have risen for the 20th month in a row, with single-family houses selling faster than in any other market in the country but one. The high demand for property in Cincinnati is likely one of the reasons why the city is increasingly becoming a renter’s market, with more than half of households renting rather than owning.

The Cincinnati metro region, which straddles three states and offers a homerun chance for real estate investors nearly as large as the city itself, is nestled along the banks of the Ohio River. Cincinnati is the 3rd largest city in Ohio and, according to Cincinnati.com, has the Midwest’s fastest expanding economy.

Furthermore, during the next ten years, the workforce is expected to grow by more than 6%. Cincinnati, dubbed the “Queen City of the West,” is home to three professional sports teams and one of the Midwest’s major businesses. The Cincinnati Red Stockings, today known as the Cincinnati Reds, were the first professional baseball team in the city, founded in 1869. Here are five reasons why 

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1. Strong Renters Market

In Cincinnati, around a quarter of the purchasers are from outside the state. According to WCPO in Cincinnati, the market provides a “real affordability proposal” and is benefiting from inward migration of individuals searching for a wonderful quality of life and an inexpensive location to call home from high-cost coastal cities.

Cincinnati is also ranked as one of the best cities for renters by WalletHub. The rating looked at major characteristics used by real estate investors, such as rental market activity, affordability in relation to family incomes, and general 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.

2. Population Growth

Over the last ten years, Cincinnati’s population has been steadily growing. The area’s rising population and the rebirth of the urban center are credited to the government’s pro-growth policies, according to city authorities.

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.

3. Real Estate Market

According to Forbes, Cincinnati is one of Ohio’s top three real estate markets. The ranking is determined by a number of important performance indicators, such as median sale and list prices, days on market, and sales-to-list price ratio. Forbes isn’t the only one that believes Cincinnati’s real estate market is fantastic.

According to WalletHub, Cincinnati is one of the finest real estate markets, based on the same important real estate metrics that investors use, such as market activity, affordability, and the economy.

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.

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4. Historic Price Changes & Affordability

Affordability and historical price variations of houses in Cincinnati should also be considered by real estate investors. Affordability is one indicator that investors use to determine if a market is suitable for rental property. Real estate investors may utilize historical price movements, both short and long term, to assist match unique investment strategies to specific cities and areas.

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.

5. 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.