In this article, we will discuss several key Ohio housing market predictions and trends including:
- Ohio will continue to be one of the most affordable places to buy a home in the US.
- Home sales may decline due to high interest rates, leading to sellers being more open to concessions. But hot housing demand will persist in some markets.
- Slow housing construction will result in a marginal year-over-year increase in home prices.
- The state’s population growth is expected to remain sluggish, impacting housing demand.
This comprehensive guide is designed for prospective homebuyers, sellers, and investors interested in the Ohio housing market. By understanding these trends, you will be better equipped to make informed decisions about buying, selling, or investing in Ohio real estate.
To provide you with the most accurate and up-to-date information, we have gathered data from authoritative news sources, Ohio REALTORS, Zillow, Redfin, and other reputable organizations. Stay tuned as we explore the ins and outs of Ohio’s housing market and what to expect in the coming years.
Ohio Housing Market Trends & Factors Influencing Growth
Before we get into Ohio housing market predictions for the next few years, let’s discuss general trends and factors influencing growth in the state.
Ohio remains one of the few places in the US where it’s cheaper to buy than rent, for those that can afford a down payment. Based on a recent report by Redfin, Cleveland, Ohio was one of just four major metro areas in the US where buying real estate was more affordable than renting.
With that said, real estate prices in Ohio have risen over the past 2 years, conforming to national trends. Let’s look at the Ohio housing market in terms of population growth, new construction growth, prices and more.
Population growth and migration patterns
Between 2010 and 2021, Ohio’s population grew by just 2.1%, from 11.5 million to 11.8 million people. This growth rate is significantly lower than the 7.3% increase experienced nationally during the same period.
From 2000 to 2020, Ohio’s population increased by 3%. However, when excluding the city of Columbus and surrounding areas, the rest of the state experienced a population loss of about 1% or 100,000 people, according to the Greater Ohio Policy Center.
The state saw significant decreases in people under the age of 54, with some exceptions in certain metro areas that attract younger residents and experience job growth.
Between 2010 and 2021, Franklin County experienced the largest population growth in Ohio, with an increase of 155,196 residents. In contrast, Cuyahoga County saw the largest decline, with a loss of 28,716 people.
Despite its relatively stagnant growth rate, Ohio remains one of the top 10 most populous states in the US, according to the Census Bureau.
The population decline in certain areas of the state has resulted in reduced demand for housing in those regions, leading to lower home prices and a buyer’s market.
However, some metro areas in Ohio, such as Columbus, continue to experience population growth due to factors such as job growth, land availability, and new housing developments. These areas are more likely to see increased demand for housing and higher home prices.
Housing affordability in Ohio, combined with factors such as yard space and green spaces, continues to attract young families to places like Columbus and Cincinnati, offsetting some of the population decline in other areas.
Employment and economic indicators
In April 2023, Ohio’s unemployment rate was 3.7%, the lowest in over 20 years. This was a decrease from the 4% rate in January 2023. Historically, the Unemployment Rate in Ohio reached a record high of 16.40 in April 2020 and a record low of 3.80 in January 2001.
In 2022, Ohio’s real GDP was 638.91 billion U.S. dollars, a significant increase from the previous year’s 629.29 billion U.S. dollars. The real estate industry accounted for $113.6 billion or 13.8% of Ohio’s gross state product in 2022.
Major investments in Ohio, such as the $4.2 billion combined investment from Honda and LG Energy Solution, and Intel’s $20 billion semiconductor plant, have contributed to the creation of thousands of new jobs in the state. Ohio is also one of the most business-friendly locations in the US, with a highly diversified economy. The state recorded 14,493 new business filings in September 2022. A total of 138,167 new businesses were created in 2022, averaging 15,352 per month.
With the Ohio economy booming and new industrial facilities being developed in Licking County, there is a growing need for more housing. However, Ohio is currently facing a limited supply of housing due to supply chain shortages since 2020.
Real estate development and construction trends
The revenue of construction companies in Ohio is projected to reach approximately 69.7 billion U.S. dollars by 2024. The state is currently experiencing a surge in construction projects, with central Ohio, particularly the Columbus metro area, receiving the largest share of these projects. Some notable developments include:
- Google’s announcement of two additional data centers in Columbus and Lancaster, requiring at least 1,000 construction workers.
- Intel’s mega-project in Licking County, which requires at least 7,000 construction workers for its semiconductor fabrication plants.
Despite these significant construction projects, residential building construction in Ohio has been slow to meet demand. A report funded by the Building Industry Association of Ohio states that the Greater Columbus region alone needs 14,000 to 19,000 homes built each year, instead of the 8,000 to 9,000 added annually over the past decade. The Building Industry Association of Central Ohio reported 12,289 housing permits in 2022, a 4% increase over 2021 and the highest in 18 years, but still insufficient to meet demand.
The slow pace of residential construction relative to demand is creating an imbalance in the Ohio housing market. This leads to increased competition among homebuyers and renters, driving up home prices and rents.
And with major projects such as Google’s data centers and Intel’s semiconductor plant underway, there may be a shift in focus towards infrastructure and commercial projects in the Ohio construction industry. This could potentially divert resources and attention away from residential construction, further exacerbating the housing supply shortage.
Government policies and regulations affecting real estate
In 2023 and 2024, the Ohio housing market will be shaped by several government policies and regulations that aim to address the rising demand for affordable housing. These policies include:
- Rent control preemption: Under newly signed House Bill 430, cities in Ohio will be prohibited from imposing rent control measures on property owners. This legislation seeks to maintain a consistent rental market landscape across the state, which benefits both landlords and bankers. However, it might also affect the affordability of rental housing for low-income residents in urban areas experiencing high housing demand and limited supply.
- Affordable housing assessment changes: An amendment to HB 45 modifies the method of assessing the value of affordable housing developments in Ohio. By potentially increasing property taxes on senior and workforce housing units, this measure could lead to higher expenses for these community-oriented developments. Consequently, this might limit the development of new affordable housing projects and reduce their overall accessibility.
The bill prohibits collection of both Historic Preservation Tax Credits and Low Income Housing Tax Credits for a single project.
- Increased funding for affordable housing development: The Ohio House of Representatives has approved $500 million per year in tax credits for affordable housing development initiatives over the next six years. This funding boost, facilitated by the Ohio Housing Finance Agency (OHFA), is meant to promote the development and rehabilitation of affordable multifamily housing projects across the state.
Cleveland, Ohio Housing Market Predictions
Cleveland was ranked No. 2 on Zillow’s list of the hottest markets in 2023 based on solid economic fundamentals and modest price growth. In the section below, we’ll look at the Cleveland, Ohio housing market predictions for 2023 and 2024.
Overview of the Cleveland metro area
The Cleveland-Elyria Metropolitan Statistical Area (MSA) is the 34th most populous metropolitan region in the United States and the third largest in Ohio. This five-county metro area, comprising Cuyahoga, Geauga, Lake, Lorain, and Medina counties, has a population of 2,088,251 as of the 2020 United States Census.
Historically, the region was a significant industrial and manufacturing hub. Although it experienced an economic recession in the late 1970s and early 1980s, it has since rebounded. Cleveland’s economy today boasts a vibrant mix of Fortune 500 companies, heavy manufacturing, and service-driven industries, as well as the Port of Cleveland, a prominent overseas general cargo port.
The Cleveland housing market has become increasingly competitive in recent years. On average, homes in the area receive three offers and sell within 25 days, indicating a notable uptick in buyer demand. Despite the median sale price of a home in Cleveland dropping to $110,000 last month, a 9.47% decline since the previous year, the overall housing market continues to grow.
This development can be attributed to slow housing construction, the region’s thriving economy and the presence of prominent employers such as Goodyear, Progressive Insurance, Diebold, Sherwin-Williams, Nestle, and Jo Ann Stores.
Cleveland, Ohio housing market predictions for 2023 & 2024
1 – Property prices
The Cleveland housing market has become a balanced market but not for long.
As of May 2023, Realtor.com classified the Cleveland housing market as a balanced market, where supply and demand for homes are about equal. While Redfin reported a decline in the year-over-year home prices, Realtor.com observed an 11% increase in Cleveland home prices between March 2022 and March 2023.
Despite the equilibrium between supply and demand, Cleveland’s housing market continues to be competitive, with multiple offers being made on properties and sellers having greater leverage. This can be attributed to a shortage of available homes for sale, which leaves buyers with limited options.
Additionally, as home prices increase, rent costs have also escalated, rising by 11% in Cleveland compared to a 0.1% national average drop in December 2022.
If the current inventory shortage persists, the balanced state of Cleveland’s housing market could be short-lived. Increasing demand for homes, fueled by the city’s growing economy, could lead to heightened market competition.
Declining home sales will rebound as mortgage rates stabilize
In January 2023, home sales in Northeast Ohio plunged 26% due to fluctuating interest rates, but a recovery is underway. From January to May 2023, the median days on the market for Cleveland homes for sale decreased from 60 to 34 days. This signals an improvement in home sales as buyers adapt to the current mortgage situation. Redfin reported a 12.6% decline in year-over-year home sales in May 2023, but also noted that many Cleveland homes received multiple offers.
With the Federal Reserve announcing a pause in its months-long campaign of interest rate hikes in June, mortgage rates are expected to stabilize. This development is likely to drive more buyers into the Cleveland market, leading to a rebound in home sales.
Cleveland will continue to be one of the most affordable places to buy a home
One of the key attractions of the Cleveland housing market is its affordability. According to a recent Redfin report, Cleveland is among just four major U.S. metropolitan areas where it is cheaper to buy a home than to rent one.
Image Source: Redfin
However, home prices in the region are on the rise. Property data from Cleveland.com for Cuyahoga County indicates a countywide median home price increase of $19,750 from March to April, which is the largest month-to-month increase so far this year. This represents a significant increase compared to the same period last year when the median home price was $158,600.
Despite rising home prices in the Cleveland area, it is expected that the city will continue to be one of the most affordable places to buy a home in the coming years. The affordability of the Cleveland housing market is likely to remain attractive to both first-time homebuyers and investors, contributing to the growth of the market.
2 – Rental rates
High rental demand will continue keeping rental prices up
Cleveland, despite being one of the poorest cities in the country and experiencing population decline since the 1950s, has seen significant rental market fluctuations since 2020. The current high demand for rentals in the Cleveland metro area has caught the attention of builders and investors. In the fourth quarter of 2022, the average asking rent in the area was $1,214, representing a 12.1% increase from the previous year, according to Moody’s Analytics. However, Cleveland remains one of the US metros where rent is most affordable.
Strong rental demand in the Cleveland metro area is expected to continue into 2023 and 2024 as more people seek affordable housing options. The city’s relatively low rental costs compared to other markets could attract potential renters looking to capitalize on the region’s low cost of living.
Strong rental market growth and relatively lower entry costs would also attract local and national investors, as well as new residential developers, to the Cleveland housing market. Increased investment in the rental market could lead to growth in rental housing options in the Cleveland metro area.
Rent growth will slow down as more multifamily properties enter the market
Yardi Matrix reported that in February, the overall average apartment rent in Cleveland was $1,115, up 6.2% year-over-year, outperforming the U.S. figure by 140 basis points. In terms of construction, Cleveland had 3,952 units under development as of February, with an additional 17,800 units in the planning and permitting stages.
Image Source: Yardi MatrixThe surge in apartment construction in Cleveland is expected to slow down rent growth in the coming years.
Cleveland Neighborhoods to Consider for 2023 and 2024
1 – Cuyahoga Falls
Cuyahoga Falls, a picturesque city in Summit County, Ohio, is a prime investment location in 2023 and 2024. With a population of 50,810, this charming city boasts a scenic landscape along the Cuyahoga River Valley, with stunning waterfalls, lush parks, and extensive trail systems.
Its strategic location between Akron and Cleveland offers easy access to major metropolitan areas and business hubs. A thriving local economy, diverse dining options, and a rich cultural scene with annual festivals and events make Cuyahoga Falls an attractive destination for both residents and tourists alike. This vibrant city presents an excellent opportunity for investors seeking growth and value in the Cleveland area.
2 – Lorain
Lorain, a city with a rich industrial history in Lorain County, Ohio, presents attractive investment prospects for investors. Its convenient proximity to Cleveland makes it an ideal choice for residents seeking easy commutes. Formerly home to notable industries such as the American Ship Building Company, Ford Motor Company, and United States Steel Corporation, Lorain is now experiencing a resurgence in its economy.
Downtown Lorain showcases a collection of historic buildings, including a long-standing theater, while community-driven events like garage sales, farmers’ markets, and festivals foster a welcoming atmosphere. Recent economic developments, such as the addition of 1,800 union jobs at Ford’s Ohio Assembly Plant in Lorain County and the creation of 125 full-time positions at Acorn Stairlifts Inc., highlight the city’s growth potential.
3 – Parma
Parma, a welcoming suburb located just 20 minutes west of downtown Cleveland, offers enticing investment prospects for 2023 and 2024. Known for its family-friendly atmosphere, Parma attracts tenants seeking long-term leases and stability. The city boasts affordable housing options and a thriving business environment, making it a popular choice for Cleveland natives.
In 2021, General Motors announced a significant investment of over $46 million in its Parma Metal Center, further solidifying the area’s economic growth potential.
Cincinnati, Ohio Housing Market Predictions
The Cincinnati housing market is one of the most competitive housing markets in the US right now with a Redfin Compete score of 90. Homes for sale in Cincinnati receive an average of 4 offers and go pending in around 6 days, according to Redfin. Let’s dive in and take a closer look at Cincinnati, Ohio housing market predictions for 2023 and 2024 in more detail.
Overview of the Cincinnati metro area
Cincinnati, affectionately known as “The Queen City,” is the county seat of Hamilton County and serves as the economic and cultural center of the Cincinnati metropolitan area. This region, also called the Cincinnati Tri-State area, encompasses counties in Ohio, Kentucky, and Indiana. As Ohio’s third-largest city and the 30th-largest metropolitan area in the United States, Cincinnati boasts a population of 2,259,935 as of the 2021 census. The city is renowned for its vibrant culture, diverse culinary scene, and numerous attractions that cater to both tourists and residents alike.
The Cincinnati housing market has experienced significant growth in recent years, reflecting the city’s robust economic environment. Home to nine Fortune 500 companies, including Macy’s, Kroger, and Procter & Gamble, Cincinnati has long been a hub for big businesses. This strong economic growth has contributed to the city’s real estate market expansion.
Traditionally known for its affordability, Cincinnati attracts young families with its cost of living and ample supply of single-family homes valued at less than $300,000. In 2022, the median sales price for homes shot past $228,000. Looking forward to 2023, data from the Cincinnati Business Courier suggests home prices will climb by over 6%, while Realtor.com projects sales growth of 3%. These trends indicate a promising future for the Cincinnati housing market in 2023 and 2024.
Cincinnati, Ohio housing market predictions for 2023, 2024 & beyond
1 – Property prices
Home prices are expected to continue rising as inventory shortage persists
The Cincinnati housing market has experienced notable growth in recent years. According to the Ohio Realtors group, the average sales price of a home in Cincinnati increased by 7.2% year-over-year, rising from $296,930 last April to over $318,000 last month. Also, a February report from Realtor ranked Cincinnati as the 30th hottest housing market in the country, climbing 165 spots compared to the previous year.
However, Redfin’s May statistics show that the number of homes sold declined by 17% year-over-year, with no change in prices. One reason for this decline is low supply relative to demand. The Cincy Realtor Alliance reported a 15.8% decline in new listings in May compared to May 2022, with only 2,129 new listings.
Based on these trends, home prices in Cincinnati will likely continue to rise in 2023 and 2024, fueled by low inventory.
Demand for housing is expected to remain strong as interest rises from out-of-metro shoppers
In the fourth quarter of 2022, Cincinnati’s housing market attracted significant attention from out-of-metro homebuyers, particularly from the nearby New York City metro area, which accounted for 25.0% of viewership according to Realtor.com’s Cross-Market Demand data.
Properties in Cincinnati have garnered 60% more views than the typical US property, indicating strong interest in the metro area. Additionally, Zillow recognized Cincinnati as one of the nation’s fastest-selling housing markets and a top market for home price appreciation.
Based on these trends, it can be predicted that demand for housing in Cincinnati will remain strong in 2023 and 2024. This will be driven by a surge in interest from out-of-metro shoppers. This sustained demand will likely result in a competitive market, potentially leading to further increases in property values and shorter time on the market for available properties.
There could be a jump in property taxes
As property prices in Cincinnati continue to rise, homeowners and investors may need to prepare for an increase in property taxes. For over 20 years, Cincinnati officials have capped property tax revenue at $29 million.
However, in December 2022, the council voted 7-2 to raise the property tax rate from 4.84 mills to 6.1 mills for the calendar year 2024. This change marks a significant departure from the longstanding policy and could lead to higher property taxes for residents and investors.
2 – Rental rates
Rents will continue to outpace home price growth
In January 2023, Midwestern markets like Indianapolis, Cincinnati, and Columbus emerged as top 10 rent growth leaders, according to a report by Apartments.com. This growth can be attributed to the fact that new supply additions have been less of a concern in these areas.
Image Source: Business Wire
The overall median rent in the Cincinnati metro area reached $1,682 in August, representing a 25.8% increase from the same month a year ago. This surge in rents was the largest year-over-year increase among the top 50 U.S. metro areas, as reported by Redfin.
The high demand for rentals, coupled with a limited number of available units, has allowed landlords to raise rents without significant constraints.
Based on these current trends, it is predicted that rents in Cincinnati will continue to outpace home price growth in 2023 and 2024. Strong demand for rental properties, along with the limited supply of units, is expected to keep upward pressure on rental prices.
Rental evictions could increase as more renters become cost-burdened
The U.S. Department of Housing and Urban Development defines a cost-burdened household as one spending more than 30% of its gross monthly income on rent. In Ohio, the state Housing Finance Agency reports that roughly a quarter of households are severely cost-burdened, dedicating more than half of their income to housing. Cincinnati, which experienced one of the fastest-rising rent rates in the country last year, has even higher numbers of cost-burdened households.
Cincinnati currently holds the highest annual rent growth market in the country, with 7.9% year-over-year rent growth, according to Zillow.
Image Source: Zillow
Cincinnati neighborhoods to consider in 2023 and 2024
1 – Middletown
Middletown is a thriving city located along the Great Miami River in southwestern Ohio, characterized by a rich history, diverse culture, and a strong sense of community. Boasting a population of 50,987 as of the 2020 Census, Middletown maintains a thriving local economy.
Major companies such as AK Steel have their headquarters in the city. Prominent medical organizations, Premier Health and Kettering Health Network, also operate multiple facilities in Middletown. Additionally, the city is home to remote campuses of both Cincinnati State and Miami University, further enriching the local economy and educational opportunities.
Middletown’s strategic location within 50 miles of the Greater Cincinnati/Northern Kentucky International Airport, Delta Airlines’ second-largest hub, adds to its appeal as an investment destination. This proximity to a major transportation hub facilitates business growth and enhances the area’s overall attractiveness.
2 – Downtown Cincinnati
Downtown Cincinnati, the central business district and economic heart of the Cincinnati metropolitan area, is a thriving hub of activity and development.
Encompassing a variety of urban neighborhoods such as Over-the-Rhine, Pendleton, Queensgate, and West End, this area is characterized by its impressive skyline, with all but one of Cincinnati’s twenty-five tallest buildings located here.
In recent years, Downtown Cincinnati has experienced an influx of new businesses, making it an attractive area for investment. With easy access to entertainment, restaurants, parks, and other amenities, it is an ideal location for investors seeking to capitalize on the city’s growth and vibrant atmosphere.
A number of major construction projects are currently underway in Downtown Cincinnati, ranging from world-class restaurants to high-end apartments, further enhancing the area’s appeal to potential investors.
3 – Hamilton
Hamilton, situated 20 miles (32 km) north of Cincinnati, is the second-largest city in the Greater Cincinnati area and the 10th-largest city in Ohio. With a population of 63,399 as of the 2020 census, this thriving city has a rich history, dating back to its origins as Fort Hamilton, a frontier outpost completed on September 30, 1791. The fort, located on the east bank of the Great Miami River, played a crucial role in supplying horses and provisions for the U.S. Army as they ventured into the American Frontier.
Ranked as the No. 1 least-costly location to do business in the U.S. by audit, tax, and advisory firm KPMG, Hamilton has attracted Fortune 500 giants such as Kroger, Procter & Gamble, and Macy’s, who have established their presence in Hamilton County. Hamilton’s business-friendly environment, rich history and strategic location combine to make it an attractive destination for investors.
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In conclusion, this article has provided insights into Ohio housing market predictions and trends for 2023 and 2024, with specific focus on the Cleveland and Cincinnati housing markets. We have also explored some of the best places to invest in Ohio. We have highlighted the potential opportunities for investors in areas such as Cuyahoga Falls, Middletown, and Downtown Cincinnati.
Having gained a better understanding of the Ohio housing market’s current landscape and future prospects, your next step should be to conduct further research on the specific areas that interest you. This research may include analyzing local real estate data, identifying potential investment properties, and connecting with local real estate teams who can offer valuable insights and guidance.
Additionally, you may want to broaden your perspective by exploring other real estate markets, such as the Texas real estate market.