We will discuss the latest Columbus Ohio real estate market trends & news and find out how they can affect the investors and homebuyers in the latter half of 2021. Columbus is a slowly and steadily growing real estate market that will be thriving well into the foreseeable future. The real estate statistics in Columbus show us that while construction is increasing, inventory is still scarce because of increasing demand. This is leading to a steady year-over-year increase in the Columbus house prices.
Let’s continue to explore the Central Ohio housing market to understand the latest trends. According to the Columbus REALTORS® Multiple Listing Service, the Central Ohio market added 3,336 homes last month, down 1.5 percent from last year and 8.6 percent from the previous month. However, home sales were up 5.0 percent in October to 3,395. At 30,497 year-to-date (January through October), home sales are on track to set a new annual record for the Central Ohio housing market.
High demand coupled with low inventory has driven up prices in many regions, including Central Ohio. According to the Oct 2021 Central Ohio Housing Report, the median sale price increased 8.9 percent to $261,478 and the average sale price was up 8.2 percent in October to $298,473. Year to date, the average sale price is $298,730 and the median sale price is $260,000, up 12.9 percent and 12.6 percent respectively.
Roughly one in four homes (23.8 percent) were cash transactions in October. Of those buyers that financed their home purchase, 58.4 percent used conventional financing, ten percent used FHA financing and 4.8 percent secured a VA loan. It took an average of 15 days to sell a home in October. More data from the realtors shows that for the first ten months of 2021, homes have sold in an average of 16 days.
Average days on market by price segments (October):
- Homes under $350,000 sold in an average of 13 days.
- Homes sold between $350,000 and $500,000 took about 15 days to sell.
- Homes in the $500,000 to $700,000 price range sold in an average of 21 days
- Homes over $700,000 were on the market for an average of 32 days.
Columbus Ohio Housing Market Prices & Forecasts 2021-2022
We shall now discuss some of the most recent Columbus real estate trends and compare them with the past year. We shall mainly discuss median home prices, inventory, and growth, which will help you understand the way the local real estate market moves in this region. Columbus is also one of the hottest real estate markets in the nation. Columbus real estate has appreciated 65.05 percent in the last ten years, for an average annual home appreciation rate of 5.14 percent. This puts Columbus in the top 20% nationally for real estate appreciation.
Homebuyers looking for a reprieve from the Columbus' heated housing market are unlikely to find one next year, according to a Realtor.com projection. The listing service ranks Columbus as the fifth-hottest housing market in the country for 2022, forecasting that house sales and asking prices will increase twice as quickly as national rates. Demand for homes in the Columbus area will continue to be strong due to their affordability, immigration into the city, the area's high proportion of millennials, and the region's excellent job growth and schools.
The median list price of homes in Columbus, OH is $229.9K, trending up 12.1% year-over-year. The median listing price per square foot is $151. The median sale price is $236K. Homes in Columbus sell faster than average compared to other cities in Franklin County. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Columbus have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 105.38% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.
- German Village has a median listing home price of $560K, making it the most expensive neighborhood in Columbus
- South Linden is the most affordable neighborhood, with a median listing home price of $115K.
Columbus has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Columbus. Other types of housing that are prevalent in Columbus include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 46% of Columbus' housing units.
About 1,856 single-family homes were sold in Oct 2021 in Franklin County. From January to July this year, 17,177 single-family homes have been sold. As compared to 2020, it makes a year-to-date increase of 7.3% in the sale of single-family homes. In Oct, the average sales price increased by 9.6% to $288,895 while the median sales price increased by 11.4% to $252,000.
Below is the latest monthly report of the Columbus Housing Market (Franklin County Area). The source of this report is – “Columbus REALTORS®.” The report compares key housing metrics from October 2021 with October 2020.
- Home sales decreased by 2.5% to 1,856 units.
- Pending sales increased by 5% to 2,047 signed contracts.
- Median Sales Price rose by 11.4% to $252,000.
- The Average Sales Price rose by 9.6% to $288,895.
- The Average Price Per Square Foot rose by 11.4% to $173.49.
- Days on Market Until Sale dropped by 12.5% to 14 days.
- New Listings dropped by 7% to 1,805 homes for sale.
- Total Inventory of Homes for Sale dropped by 14.7% to 1,477 units.
The report shows it is still a strong seller's real estate market with just 0.9 months of inventory left on the market, which is only likely to keep driving prices higher in the near future. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly. As we move forward the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges.
Columbus Ohio Real Estate Market Forecast 2022
What are the Columbus real estate market predictions for 2021 & 2022? We get to find that on Zillow, the typical home value in Columbus is $216,840. Let us look at the price trends recorded by Zillow over the past few years. Since Dec 2011, the typical home prices in Columbus have appreciated by nearly 106.5%. The prices rose by 17.7% over the last 12 months alone. Last year saw was the eighth consecutive year of home price gains.
Columbus is a hot seller’s real estate market as there exists a limited supply of homes, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, the housing demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace. According to NeighborhoodScout, the real estate appreciation rate in Columbus in the last quarter was around 2.74%, which amounts to an annual rate of 11.44%.
- The typical home value of homes in Columbus Metro is $266,594, up 16.9% over the past year.
- Zillow predicts they will rise 14.4% in the next twelve months.
- The Columbus metropolitan area consists of the counties of Franklin, Delaware, Licking, Madison, Pickaway, and Fairfield.
- The current population estimate is approximately 1.8 million people.
- Columbus home values have gone up 17.7% over the past year and will continue to rise in the next twelve months.
- Franklin County home values have gone up 17% over the past year and will continue to rise in the next twelve months.
Here is the Columbus real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 14.4% until Oct 2022.
Columbus has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. This market is very much skewed to sellers due to a very low level of inventory that can't meet the demand of the rising population. If buyer demand eases, we could see a positive influence on Columbus' low inventory levels while at the same time seeing a negative impact on sales. Columbus and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term.
In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Columbus can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Columbus real estate market remains strong and skewed to sellers, due to persistent imbalance in supply and demand.
Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. Currently, the inventory is relatively increasing in Columbus, so buyers should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars.
Columbus Real Estate Investment Overview?
Should you consider Columbus's real estate investment? Many real estate investors have asked themselves if buying a property in Columbus is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2021 & 2022. If you are looking to make a profit, you don’t want to buy the most expensive property on the Columbus real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Columbus that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Is it a good time to buy a house or invest in Columbus? Let’s talk a bit about Columbus and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. Columbus, Ohio is the 14th largest city in the U.S. It is home to almost nine hundred thousand people. Forbes reported in 2018 that Columbus is a rare Midwest success story, a “Rust Belt” city that has truly transformed itself and has begun growing again.
It is the only large northern city to grow by more than 10% between 2010 and 2018. Compare this to many northern cities continuing to hemorrhage people, whether they are moving to the suburbs or the south. This makes the Columbus housing market much healthier than Cleveland, Detroit, and smaller Ohio cities from which it has drawn population. The Columbus Ohio real estate market is bigger than many think. Take the suburbs into account, and the Greater Columbus metro area encompasses around two million people. Around 2.4 million people live in the combined statistical area (CSA).
The home prices in Columbus are still relatively low, so if you want to invest in Columbus real estate, then now would be a great time to do so. It is the second-largest metro area in the state. The area is expected to grow by more than 50% over the next 20-25 years. The real estate appreciation rate in Columbus in the latest quarter was around 0.45% which equates to an annual appreciation rate of 1.81%. Even small changes in the appreciation rate can change the long-term value of buying considerably.
Let’s take a look at the number of positive things going on in the Columbus real estate market which can help investors who are keen to buy an investment property in this city. We’ll address the biggest factor pulling people to the Columbus housing market next.
Columbus Real Estate Is Appreciating for Many Reasons
A city that’s losing people is typically going to see property values decline, though desirable neighborhoods may see steady or slight increases in valuation. The Columbus Ohio housing market is seeing steady growth due to slow population growth. Between 2013 and 2020, property values have increased. Over the last year, prices increased by around 17%. This is partially due to the demand for older, renovated homes in established, walkable neighborhoods. The limited supply of family-friendly homes in these areas is driving up their prices.
One interesting factor driving property valuations in the Columbus Ohio real estate market is city tax abatements in downtown neighborhoods. The city is encouraging people to buy up properties and renovate them, whether to rent out or live in themselves. Another point in favor of Columbus is that they didn’t crack down on private rentals like Airbnb. For example, they decided in 2018 not to limit the number of days people could rent their homes out on Airbnb and similar sites.
Columbus is Landlord Friendly
Ohio is rather landlord-friendly, in the same category as Idaho and North Carolina. That makes it much more landlord-friendly than neighboring Midwestern states and far better than Pennsylvania. There are no laws regarding pets, payment grace periods, or re-keying. Interest owed on deposits is modest. Rental agreements are recommended but not required for short leases. There is no statutory limit on late fees but they must be “reasonable.”
Columbus' Sizable Student Market Is a Boon to Investors
Columbus, Ohio is the state capital. This means there are several universities in the city. Franklin University hosts nearly five thousand students. Capital University has about three thousand students. Ohio Dominican University is home to nearly two thousand students. There are nearly 40 colleges within fifty miles of Columbus.
And the sheer variety of colleges in the area means that investors can rent to the large population of students in the Columbus Ohio real estate market without worrying about their property values rising and falling based on the popularity of a flagship school. Between kids attracted to the Columbus Ohio housing market for school and work and choosing to stay to start their own families, the Columbus market enjoys a median resident age of 32.3.
This is seven years less than the median age for the state of Ohio. We can expect the next generation to grow up here to stay, as well, fueling demand for the Columbus housing market. Columbus, Ohio has to compete with many other surrounding cities in the Midwest. However, one point in its favor is the lower cost of living. That attracts residents who earn just as much here as in Chicago but don’t have to pay as much for things. The annual salary is a little less than the national average, but rents and housing are even lower – and much lower than hotter markets like Chicago.
Rental Trend: The average rent for a 1-bedroom apartment in Columbus, OH is currently $825. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Columbus remained flat. The average rent for a 1-bedroom apartment decreased by -3% to $825, and the average rent for a 2-bedroom apartment remained flat.
- The average rent for a 2-bedroom apartment in Columbus, OH is currently $1,100. Compared to last year, the average rent price has remained flat.
- The average rent for a 3-bedroom apartment in Columbus, OH is currently $1,650. This is a 10% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Columbus, OH is currently $2,095. This is a 10% increase compared to the previous year.
Columbus' Economy Is Healthy
We’ve already mentioned that Columbus, Ohio is considered a “Rust Belt” city that’s unique for a rebound. It enjoys unemployment rates of around 5%, but this is phenomenal compared to the surrounding area. The US saw incomes grow 22% between 2010 and 2016. Columbus metro area incomes grew roughly 25%. The city’s economy is healthy enough to retain many young people and attract some coming here to work, but it isn’t so hot that the bubble may burst. Most of the Columbus housing market growth has been younger people moving there from Ohio. This includes but isn’t limited to those who came for school but decided to stay.
Update: The BLS reported that the unemployment rate for Columbus rose 0.1 percentage points in July 2021 to 5.2%. For the same month, the metro unemployment rate was 0.2 percentage points lower than the Ohio rate. The unemployment rate in Columbus peaked in April 2020 at 13.5% and is now 8.3 percentage points lower.
Columbus' Tax Climate Is Balmy
Ohio’s effective property tax rate is 1.6%. That’s higher than the national average. However, Ohio is better than its peers for real estate owners, since its property tax rates are lower than those in several surrounding Midwestern states. Property tax rates do vary between counties, so you may pay lower property taxes for investment property in the suburbs as in downtown Columbus.
Redevelopment in Columbus
There are at least ten major redevelopment projects planned around Columbus, Ohio. These projects total an estimated billion dollars. Each of these redevelopment projects will increase the demand for homes in the area. In neighborhoods with new luxury condos, shopping, and employers, everyone’s property will be worth more. This allows real estate investors to invest in the Columbus Ohio real estate market in one or multiple locations, depending on their budgets and preferences. Nor do you have to worry about the one multi-family housing unit you bought collapsing in value because the mega-project in downtown was delayed or fell through for lack of funding.
Columbus Investment Properties
Investing in Columbus real estate can be a worthy investment due to a steady rate of appreciation. It mixes smart redevelopment, quality of life, and growth to create a stable, slow-growing market that will be thriving well into the foreseeable future. If you're looking to buy Columbus investment properties, it makes sense to do so when inventory levels are relatively high, like in the current phase of the pandemic.
The surplus of available opportunities can lead to softer negotiations with sellers. Columbus has a lower cost of living than the national average. Good cash flow from Columbus investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Columbus real estate investment opportunity would be key to your success.
The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Columbus investment property and you should be able to get a good return on your investment over the long term. The neighborhoods in Columbus must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls.
A cheaper neighborhood in Columbus might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. The inventory is low, but opportunities are there.
Homes downtown tend to sell at higher prices than those on the city's south side. There are many neighborhoods to consider for buying properties in Columbus. Properties in Worthington and downtown Columbus have higher than average median home prices, and their relatively low crime rates add additional appeal. Places like Victorian Village, where home prices remain higher than many other places in the city, support a strong local market, and they can signify a lower level of risk. Some of the other popular neighborhoods in Columbus, Ohio are Upper Arlington, North Linden, and Grandview Heights.
Upper Arlington has a median listing price of $450K, making it the most expensive neighborhood. South Linden is the most affordable neighborhood in Columbus with a median listing price of $59K. Even as Columbus's home prices have reached new heights, they are still near to the national average, and the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain. Millennial homebuyers can't outbid real estate investors and hence end up renting.
As with any real estate purchase, act wisely. Evaluate the specifics of the Columbus housing market at the time you intend to purchase. Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Columbus.
Consult with one of the investment counselors who can help build you a custom portfolio of Columbus turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Columbus.
Not just limited to Columbus or Ohio but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Columbus turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
There are many other markets in the state of Ohio for real estate investing. Cincinnati is one of them. The Cincinnati real estate market is on the upswing and looking strong for the foreseeable future. It provides many opportunities for investors, regardless of the market you want to invest in. It is growing faster than the nation as a whole, though this is partially due to its recovery from a low point during the Great Recession. It is recovering home values and growth in cheap markets can yield the greatest ROI.
Cleveland is another good market to invest in real estate. Cleveland is a notable exception to the decline of the Rust Belt cities. It has managed to reinvent itself, shifting from classic manufacturing to biotech and medicine. In the process, it has maintained its population and has strong potential for growth both economically and demographically.
Similarly, you can also consider Akron for real estate investing. It also presents a great opportunity for real estate investors. Akron has been known as the “Rubber Capital of the World” for more than a century. It is home to around 200,000 people. However, the Akron real estate market is much larger than this. Include the suburbs and small towns that surround it, and the Akron housing market contains roughly 700,000 people. The Akron area has hit its low and is starting to appreciate. This is a safer choice than buying in depressed areas that may not recover anytime soon.
Dayton is the sixth-largest city in Ohio. The city is home to roughly 140,000 people. The metro Dayton Ohio housing market includes around 800,000 people. Home values are predicted to go up steadily in the next five to six years making Dayton a great place for real estate investing. The Dayton Ohio real estate market is one of the best deals in the Midwest. It balances affordable properties with strong future growth, a large rental market and stable property values, low carrying costs, and decent ROI.
Let us know which real estate markets you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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