Curiosity, it got the best of me. After yesterday’s blog post I got to wondering which cities had the greatest change in rental rates and more specifically which saw the greatest decrease in rental rates. So, I decided to start closest to home here in Cincinnati. I began by pulling the same three reports which I had pulled for the three combined cities and look at the data presented there to see what we could find.
The first data set we’re going to contemplate is the actual data that shows what rental rates did across the trailing 23-month timeframe. As with the composite data of all three cities, Cincinnati mirrored the discretionary increase across the time period, however it was much stronger in the Upper Mid-Range and Lower Mid-Range, Workforce-Upper and Workforce-Lower than the composite data.
What this tells me is that Cincinnati had much greater demand for rental housing and as such property owners were able to command higher percentage increases for their units than the data set as a whole. Its interesting to note that the rents in Cincinnati are higher than the composite data set, I attribute this to Dayton being included in the data set as Dayton has historically lower rental rates.
The first data set we’re going to contemplate is the actual data that shows what rental rates did across the trailing 23-month timeframe. As with the composite data of all three cities, Cincinnati mirrored the discretionary increase across the time period, however it was much stronger in the Upper Mid-Range and Lower Mid-Range, Workforce-Upper and Workforce-Lower than the composite data.
What this tells me is that Cincinnati had much greater demand for rental housing and as such property owners were able to command higher percentage increases for their units than the data set as a whole. Its interesting to note that the rents in Cincinnati are higher than the composite data set, I attribute this to Dayton being included in the data set as Dayton has historically lower rental rates.
Next, we move, as we did in the previous post, to look at how rental trends in the actual dollar amounts increased or decreased. Here too we can see that Cincinnati is strong overall, with actual dollar increases well above the composite data set. It should be noted though that In Q1 2019 the Upper Mid-Range saw a decrease of $5 and in Q2 2019 the Discretionary saw a decrease in rent increases of $4; whereas in the composite data set the Upper Mid-Range saw an increase of $4 and the Discretionary saw an increase of $17.
Finally, we come to the percentage changes across the five property asset classes in Cincinnati as measured against the composite data set of Cincinnati, Dayton and Columbus for the trailing 23 months from January 2020. The strength of Cincinnati persists here in the percentage increases as it had in the dollar increases, and overall though there are a few points of negative changes in rental rates, the overall trend here remains positive. The data points mentioned above that I highlighted are that in Q1 2019 the Upper Mid-Range decreased only 0.3% or $5 and in Q2 2019 the Discretionary class decreased only 0.2% or $4. It appears that the overall effect of these two slight negative points had minimal effect on the composite percentages overall.
My takeaway from this analysis has been that Cincinnati appears to be a strong rental market overall with only tow instances of slight negative rent increase amounts in percentages and dollars, but in subsequent periods the market was able to overcome that slight decline and rebound substantially. This shows me that Cincinnati overall is a healthy market and should be strongly considered for current and future investment by the market.