$1,295 2Q 2024
2.8%
94.1% 2Q 2024
-10 BASIS POINTS
1,647 [YTD: 2,902]
1,082 [YTD: 2,179]
Despite a broader market slowdown in terms of rent growth, Columbus recorded a 2.8% annual rental growth rate in the second quarter of this year, which ranked eighth among the 50 largest U.S. apartment markets.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
Demand in the Columbus market over the past year ending in June 2024 was concentrated in sought-after areas with a higher share of deliveries. The Southern Columbus and Northeast Columbus submarkets each saw an absorption of over 1,000 units in the last twelve months. Downtown Columbus also saw solid demand, with 646 units of annual net absorption. However, despite this demand, record-level supply has exerted downward pressure on occupancy rates, particularly in Downtown Columbus, which experienced a 200-basis point drop year-over-year to 92.1% as of June 2024.
Following a record-high year for deliveries in 2023, which saw Columbus’s multifamily inventory expand by over 8,500 units, the pace of deliveries is now slowing. In the first half of 2024, 2,179 units opened their doors, with another 3,350 units scheduled for the second half, bringing the annual total to approximately 5,300—more in line with historic delivery norms. In total, there are around 8,790 units in various stages of construction across the Columbus metro area, with roughly 38% of these units located in fast-growing Delaware County. Delaware County is the fastest-growing county in the Columbus metropolitan area, having grown 7% between 2024 and 2023, compared to 1.8% for the region overall.
By the end of Q2 2024, the Columbus apartment market demonstrated resilience with positive net absorption, similar to pre-pandemic levels, although it didn’t fully keep pace with the expansion of multifamily units over the past year. The first half of this year indicates a resurgence, with the average market occupancy rate holding steady at 94.1%, a slight 10-basis point drop from the previous year. Occupancy levels have been stable since Q4 2023, and a 30-basis point improvement from last quarter suggests a reversal of the declining trend. Ten of Columbus’s 14 submarkets exceeded 94% occupancy, with Madison County leading at 99.6%. In contrast, Downtown Columbus, which has seen significant recent inventory expansion, recorded the lowest occupancy at 92.1%.
While the U.S. apartment market faces sluggish rent growth, Columbus, OH, remains resilient. In the first half of 2024, Columbus ranked eighth among the 50 largest U.S. apartment markets with a 2.8% year-over-year rent increase, pushing the average rent for new leases to $1,295. Despite a 2.9% rent decline in Downtown Columbus and a 2.3% drop in Madison County, all other submarkets reported increases, with Morrow County experiencing the highest growth at 8.8%. Lower-tier properties have recently driven overall market growth, with an average annual rent growth of 3.5%, well above the national average of 1.0%. This shift towards affordable housing is a response to rising living costs. Conversely, mid-tier and luxury properties have seen slower growth due to increased competition from the influx of new supply, which has limited rent increases. However, this trend may reverse once the new supply is absorbed, and construction activity realigns with historical levels.
Average Monthly Mortgage Payment
Average Monthly Rent
The annual total for individual asset transactions of conventional multifamily properties in Columbus, OH, decreased by 19.7% in the year ending Q2 2024, reaching $508.9 million. Over the past four quarters, 17 deals were executed, down from 31 in the previous year. The majority of buyers were private investors, as institutional investment remains largely on the sideline. However, recent transactions by KKR and Blackstone in Q2 2024 suggest that institutional players may be shifting back into the market.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
|
Under 35 Years
|
35 to 44 Years
|
45 to 54 Years
|
55 to 64 Years
|
65 to 74 Years
|
75 to 84 Years
|
85 Years & over
|
|---|---|---|---|---|---|---|
|
-0.6%
|
0.0%
|
-0.5%
|
0.8%
|
0.7%
|
-0.1%
|
-0.2%
|
Renters in Columbus, OH, are skewing older. The 55-64 age group, nearing retirement, has grown the fastest, increasing by 0.8% since 2019. Additionally, the under-35 demographic is also experiencing positive growth, while other renter demographics have declined or stagnated. This trend suggests a growing need for rental options that cater to the preferences of both a maturing population and a youthful population.
As 2024 progresses into the second half, the Columbus apartment market continues to outperform many other U.S. markets amidst generally softening fundamentals. This resilience is bolstered by strong economic growth and a well-managed construction pipeline. Demand for rental properties remains healthy, surpassing the number of completions in the first half of 2024.
Columbus is positioning itself as a major investment hub in the Midwest, driven by a burgeoning tech and financial services industry and the presence of Ohio State University—one of the largest college campuses in the nation. Local policies aimed at attracting new businesses and fostering diverse employment opportunities, particularly in the Professional and Business Services sector, are critical drivers of future apartment demand. Additionally, two new semiconductor chip facilities in New Albany are expected to create 3,000 direct jobs. Honda’s $237 million investment in 2023 to make Ohio its North American electric vehicle hub will further drive long-term job growth and housing demand.
