How do the housing markets in Ohio’s largest metropolitan regions compare?

A surge of new home construction rang in the new millennium just over a decade ago, but that surge quickly ended when the now infamous housing bubble burst, subsequently leading to the Great Recession.

In recent years the economy has begun to rebound, but the housing market still has not quite come back. In particular, the home ownership housing market has not come back.

This had led to a new surge of housing construction as developers work to build product for a still growing U.S. population. Cities have seen much of this new apartment construction as the rebounding economy has coincided with the entrance of Millennials into the housing market.

The narrative has been that rentals are surging while home ownership is sagging, but according to newly released data from the U.S. Census Bureau, this common narrative is only partly true.

Home Ownership Rates in Ohio MSAs
Apartment Vacancy Rate in Ohio MSAs

In Ohio’s five largest metropolitan regions the data shows that home ownership rates have settled out around the same levels they were at nearly two decades ago. And while apartment vacancy rates have been plummeting in recent years, they are still higher than they were in the 1980s and 1990s.

Akron and Cleveland are virtually tied for the highest home ownership rates in Ohio at 66%, but this is down from their respective peaks of 80% and 77% around the height of the housing bubble. At 61%, Columbus scores the lowest of Ohio’s five biggest metropolitan regions in terms of home ownership.

Columbus boasts the state’s lowest apartment vacancy rate at 6%, which is approaching the capital city’s all-time lowest apartment vacancy rate of 5% in 1990. The Dayton region has the highest apartment vacancy rate in the state, with its apartments sitting empty nearly twice as much as those in Columbus.

Both when it comes to home ownership and apartment vacancy rate, Cincinnati seems to serve as the state’s trend line. For the year ending 2013, the Queen City had a home ownership rate of 63% and an apartment vacancy rate of 9%.

While the aforementioned data seems to cloud the discussion about housing market trends, additional data also shows that overall inventory and prices of owner-occupied units is decreasing, while inventory and pricing of rental units is increasing.

Locally, Cincinnati is in the midst of an apartment building boom, with thousands of units across the region currently under construction. While home permits have increased recently, those numbers pale in comparison.

  • matimal

    Columbus does stand out from the rest. It really is more transient and responsive to short-term market forces than the other metros.

    • I suspect having a 50,000+ population at just one university plays a considerable role in this matter.

    • Neil Clingerman

      I also think that its population tends to be younger, in part because of the University. A lot of students stay around too. Younger people are delaying getting a house the longest.

    • Eric Douglas

      Yeah, UC + Xavier has to be around 50K, but UC does have that commuter issue it has to deal with. How many UC alums stay in cincy vs. OSU alums that stay in columbus?

    • Ohio State University (Columbus): 64,000
      University of Cincinnati (Cincinnati): 42,000
      Northern Kentucky University (Cincinnati): 15,000
      Franklin University (Columbus): 8,000
      Xavier University (Cincinnati): 6,000

      I’m not sure NKU has quite the outside draw that the others have, but I included it anyways. Even with NKU, the three big Cincinnati universities have around 63,000 student, which still doesn’t even match OSU’s 64,000. Then Columbus has another 8,000 at Franklin University.

  • Jason Bowman

    Having just moved to Columbus from Cincinnati for a job (yes, I really miss the real urban feel of Cincy…it’s too sprawly and suburban here for my taste), I have to say this is a more transient city…its not a place people come to for a long time unless you come work for the government or one of the large companies here.

    • matimal

      I know, I lived there for four years. I lost count of how many people I got to know who seemed to move on at the drop of a hat. I got to know a guy who’d lived in Columbus for 10 years. He joked that he was an “oldtimer” and said that he had no friends in town who’d live there as long as him. Columbus was like living in a hotel instead of an apartment building.

    • Eric Douglas

      Columbus is the modern auto city in the mold of Indy or Houston. It’s going to be more closely tied to the housing market like Detroit, Las Vegas and Phoenix, which we’ve obviously seen to be a bad thing when it goes bad.

  • I pretty clearly see declining homeownership rates in four of five cities, and lower apartment vacancy rates in all five cities — which matches the national trend. Homeownership was artificially inflated by cheap money, and should trend back to where it was before. Meanwhile, the number of foreclosed homeowners moving out to rentals isn’t driving the huge increase in renters (except for some popped-bubble markets, perhaps including Cleveland): it’s the fact that first-time homebuyers are staying in rentals, and new households are almost never buying.

    • Recent numbers do align with the national trend. My big takeaway after looking at the data was that the numbers today, after this five-year trend, are roughly the same as where they were 30 years ago. In fact, home ownership rates are a bit higher today than they were in 1986 and apartment vacancy rates are a bit higher as well.