Founded in 1812 and named for the famed explorer Christopher Columbus, the city of Columbus is the state capital of Ohio and the most populous city in the state. Per 2019 estimates, Columbus is now home to almost 900,000 people.
This city is known for its diverse offerings. In particular, it's home to Ohio State University, which is a large driver of the economy. However, six Fortune 500 companies, including Cardinal Health (NYSE: CAH), American Electric Power (NASDAQ: AEP), L Brands (NYSE: LB), Nationwide, Alliance Data Systems (NYSE: ADS), and Huntington Bancshares (NASDAQ: HBAN), have also chosen to settle in the area.
The state of the market
Fortunately, although the city is still recovering from the pandemic, there are a lot of positive things to say about Columbus's investing scene. Here are three major trends to be aware of before you add a property in this area to your portfolio.
Home prices are on the rise
With just 1.5 months’ worth of inventory available, Columbus is definitely being impacted by the inventory shortage. As a result, home prices have shot up by 10% on a year-over-year basis. Still, at a median home price of only $254,000, the average home in Columbus is much more affordable than in the rest of the nation.
Housing permits are surpassing projections
As of March 2021, both single-family and multifamily housing permits are surpassing projections. In addition, the architectural billings index is up 12% year over year and now measures above 50, which also suggests an increase in the number of new construction projects. Short term, this will likely help to ease the inventory shortage that's driving the rise in home prices.
The financial health indicators are mixed
For its part, the foreclosure rate in Columbus is down. Overall, this is a good sign, but it's likely due in part to pandemic-related assistance measures, which may end in the near future. Meanwhile, although the delinquency rate is still higher than it was pre-pandemic, it's worth noting that this index has been on the decline for the last few months.
Columbus, Ohio, housing demand indicators
All data and charts supplied by Housing Tides by EnergyLogic.
Although you can still see some lasting effects from the pandemic in Columbus’s housing demand indicators, they should provide investors with a relatively positive outlook.
One of the first things to notice about Columbus's economic landscape is that unemployment is up 1.4% year over year as of February 2021. While that figure is not ideal, it's hardly unexpected, given the widespread effects of the coronavirus pandemic. Additionally, it's important to point out that at just 5.4%, the current unemployment rate in Columbus is actually lower than the national rate of 6.2%.