Columbus, OH Real Estate Market Trends & Analysis [Updated 2020]

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The Columbus real estate market in Ohio has been hit hard by the Coronavirus pandemic. That said, it appears as if real estate in Columbus was relatively insulated from the impact of COVID-19. While “shelter-in-place” orders have certainly impeded the market’s progress, Columbus appears to have fared better than many major metropolitans across the country. Unemployment numbers—while historically high—remain below the national average and home values remain strong. Additionally, demand remains intact, which should bode well for the market’s recovery. All things considered, the Columbus real estate market may have taken a single step back in the face of a pandemic, but it appears poised to take two steps forward sooner rather than later.

Columbus Real Estate Market 2020 Overview

  • Median Home Value: $174,109

  • 1-Year Appreciation Rate: +8.4%

  • Median Home Value (1-Year Forecast): -0.6%

  • Median Rent Price: $1,250

  • Price-To-Rent Ratio: 11.60

  • Unemployment Rate: 13.7% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 898,553 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $51,612 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 14.05%

  • Foreclosure Rate: 1 in every 10,452 (0.9%)


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Columbus real estate investing

2020 Columbus Real Estate Investing

The Columbus real estate investing community should take solace in the fact that their market fared better than many of its national counterparts. That’s not to say real estate in Columbus was unscathed, but rather that it appears slightly more insulated from the national catastrophe. Most notably, unemployment numbers and home values haven’t been hit as bad as their national counterparts. It is worth noting, however, that the retraction of the Columbus real estate market may have actually created some attractive investment opportunities. In particular, some of today’s leading indicators suggest now may be a great time to invest in a rental property.

The new real estate landscape resulting from the wake of the pandemic isn’t necessarily worse; it’s just different. As a result, Columbus real estate investors will need to listen to what the market is telling them and translate it into action. The real estate industry is certainly different after the arrival of the Coronavirus, but the emergence of three indicators have made buy-and-hold investment strategies more attractive:

  • Interest rates on traditional loans are historically low

  • Years of cash flow can easily justify today’s higher acquisition costs

  • The price-to-rent ratio suggests high home prices will increase rental demand

For years, rehabbing was the most prevalent exit strategy implemented by Columbus real estate investors, but we are starting to see a new trend. Now is the time to start adding to a passive income portfolio.

As of May, the average rate on a 30-year fixed-rate loan was 3.23%, according to Freddie Mac. Consequently, May marked the lowest average mortgage rate for an entire month ever, and the Fed just announced it will keep interest rates low for the foreseeable future. As a result, the cost basis for real estate in Columbus is lower than what median home prices suggest. At their current rate, mortgage rates will save today’s buyers thousands of dollars, and real estate investors will be able to pad their bottomline. At the very least, investors will be able to justify the latest bout of appreciation with much lower borrowing costs.

With today’s interest rate and a 20.0% down payment, investors can expect to spend somewhere in the neighborhood of $955 a month if they were to acquire a property at the city’s median home value. At that price, buyers would be spending about $50.00 less on their mortgage each month than they would have if they bought in the first month of 2020 (when home values and interest rates were slightly higher).

More importantly, the average rent in the Columbus real estate market is about $1,250, or $295 more than what the median mortgage would be. The average Columbus real estate investor could conceivably buy a home for the median value and rent it out for a $295 profit each month. That, of course, is a very average example, and savvy investors may be able to lower their cost basis considerably by acquiring a cheaper home. However, the fact remains: Investors able to rent out their assets will be able to pay down their mortgage with other people’s money. The cash flow generated from renting their home could easily justify today’s higher acquisition costs.

With a price-to-rent ratio of 13.7, it is currently more affordable to buy a home in the Columbus real estate market. Typically, a 13.7 ratio would work against landlords, as more people would be looking to buy, but today’s insufficient inventory levels are actually forcing more people to rent. The lack of available housing is actually driving up rental demand, which bodes well for today’s rental property owners. Not only will rental demand reduce vacancies, but it will simultaneously drive up rent prices, making profit margins more attractive.

Local investors are lucky to have a number of viable exit strategies at its disposal, but none appear more attractive than building a proper rental property portfolio. Too many important market indicators are pointing towards becoming a buy-and-hold investor to ignore.

2020 Foreclosure Statistics In Columbus

Halfway through 2020, the Columbus housing market has about 387 homes that may be classified as distressed. According to RealtyTrac, each of those homes fits into at least one of three categories: default, auction or bank owned. One in every 10,452 homes is distressed, or 0.9% of Columbus’ entire market. To be clear, that’s a relatively low foreclosure rate, which probably has something to do with the city’s unemployment rate. At 13.7% (as of April), the city’s unemployment rate is below the national average, which was 14.7%. Even after the surge in unemployment resulting from the Coronavirus, Columbus’ unemployment rate is better than the national average, which appears to have helped the foreclosure rate.

The number of properties that received a foreclosure filing in the second quarter (May 2020) decreased from the previous month and this time last year, 86.0% and 96.0% respectively. Nearly all of the homes classified as distressed were bank owned, which suggests they had already been repossessed, failed to sell at auction, and were currently in the possession of the loan originator. As a result, the Columbus real estate investing community will greatly increase their chances of finding a foreclosed home if they talk with local banks.

Distressed homes represent the best opportunity to buy a discounted property, which has many people asking one, simple question: Where should I invest in Columbus? It makes sense to invest in the neighborhoods with the highest distributions of foreclosures, which include:

  • 43222: 1 in every 1,753 homes is currently distressed

  • 43211: 1 in every 5,207 homes is currently distressed

  • 43085: 1 in every 10,618 homes is currently distressed

  • 43223: 1 in every 10,799 homes is currently distressed

  • 43204: 1 in every 19,314 homes is currently distressed

It is worth noting, however, that the Columbus real estate market is expected to see a surge in foreclosures sooner rather than later. The introduction of the Coronavirus will most likely put a significant financial strain on many homeowners, and when forbearance programs run out later in the year and influx of foreclosures will most likely ensue. There’s no telling how much foreclosures will rise, but it is safe to assume they will increase by the end of the year.

2020 Median Home Prices In Columbus

At this time last year (July 2019), Columbus’ median home value was around $163,000. However, few markets have appreciated at the same rate, which begs the question: How much does it cost to live in Columbus, Ohio?

Following an impressive year of appreciation, the median home value in the Columbus real estate market is now $174,109. To say the last year was impressive, however, is an understatement. Over the last 12 months, real estate has appreciated 8.4%. To put the last year into perspective, the median home value in the United States is now $248,857 after appreciating by as much as 4.1% in one year’s time.

Since the Great Recession, or at least when real estate in Columbus hit its lowest point (around February 2013), home values have appreciated 76.7%. At that rate, Columbus easily outpaced the national average over the last decade. Over the same period, the median home value in the United States increased 48.1%.

Over the last 20 years, certain neighborhoods have contributed to the appreciation rate in Columbus more than others. Years of historic appreciation, in fact, have made these the most expensive neighborhoods in Columbus (according to NeighborhoodScout):

  • W Dublin Granville Rd / Olentangy River Rd

  • Hard Rd / Riverside Dr

  • City Center / Franklin U

  • Neil Ave / W 2nd Ave

  • Mount Air

  • Indianola Ave / Fallis Rd

  • S High St / E Whittier St

  • W 5th Ave / Neil Ave

  • W Spring St / Neil Ave

  • Mckinley Ave / Grandview Ave

Moving forward, the presence of the Coronavirus is expected to drop prices, but only temporarily. Experts predict prices will drop a modest 0.6% over the next 12 months. That means prices will remain high, and perhaps even return to previous highs as soon as this time next year. If for nothing else, the same inventory shortage that served to increase prices for the better part of a decade may be magnified by home builders sitting on the sidelines during the pandemic. Without new builds being brought to the market, it is safe to assume competition will remain high, driving prices up even higher than they are now.

Columbus Real Estate Market: 2019 Summary

  • Median Home Value:$156,200

  • 1-Year Appreciation Rate: 9.7%

  • Median Home Value (1-Year Forecast): 5.8%

  • Median Rent Price: $1,300

  • Median Days On Market:40

Columbus Real Estate Investing 2019

The Columbus real estate market was recognized by Realtor.com as the hottest real estate market in the country in 2019. Thanks, largely in part, to a unique combination of supply, demand, job growth, and pricing, real estate in Columbus garnered the momentum it needed to elevate to where it is today. As a result, Columbus real estate investors have been able to take favorable market conditions and use them to their advantage.

The median home value in the Columbus real estate market realized upwards momentum for the better part of a decade. Since the first quarter of 2013, in fact, the median home value has served to increase year-over-year. Over the course of the previous year (February 2018 to March 2019), Columbus’ median home value increased by as much as 9.7%, easily outpacing the national average by 3.1%.

The foundation of the entire Columbus real estate investing industry is centered on two very important indicators: price and demand. Strong job growth and relatively low interest rates, in particular, fueled an incredibly high level of demand, while a distinct lack of inventory sent prices soaring. The combination sent buyers scrambling, particularly millennial buyers looking to take advantage of the area’s growing job market. As a result, Columbus real estate investors had no issues finding buyers for their rehabbed properties.

Columbus Real Estate Market: 2016 Summary

  • Median Home Price: $181,700

  • 1-Year Appreciation Rate: 5.6%

  • 3-Year Appreciation Rate: 22.3%

  • Unemployment Rate: 4.2%

  • 1-Year Job Growth Rate: 4.3%

  • Population: 822,553

  • Median Household Income: $43,844

Columbus Real Estate Investing 2016

The Columbus housing market was blossoming into an investor’s market in 2016, as home prices fell below the national average. The median home price was $181,700 during the second quarter, compared to the national average of $239,167. Although home prices for Columbus real estate were up from the previous year, price growth was unhurried. In the eyes of investors, however, appreciation rates were red-hot, with homes appreciating faster than the national average.

As of July 2016, there were about 3,972 properties in some stage of foreclosure. The number of Columbus foreclosures in the month of July was 42.0% higher than the previous month and 43.0% lower than the same period in the previous year. Additionally, the number of REO properties in Columbus fell 41.8% from the previous month and 53.8% from the same time the year before.

Columbus Real Estate Market: 2014 Summary

  • Median Home Price: $165,700

  • 1-Year Appreciation Rate: 8.9%

  • Unemployment Rate: 4.3%

  • 1-Year Job Growth Rate: -0.7%

  • Population: 822,553

  • Percent of Underwater Homes: 28.3%

  • Median Income: $54,079

Columbus Real Estate Investing 2014

Individual Ohio housing markets were the beneficiaries of a great 2014. Central Ohio, in particular, exhibited moderate increases in terms of volume and price. Developments created an environment that favored neither buyers nor sellers. Columbus, as a result, demonstrated a propensity for favorable market conditions.

Over the course of 2014, sales prices jumped in the face of elevated demand. With that in mind, experts projected that sales prices will hold steady for the rest of the year, even with appreciation expected to last into 2015. The Columbus housing market currently boasted a median home price of $165,700. Considering that the national average price of a home was approximately $216,567, Columbus was considerably less expensive than the rest of the country in 2014.

Perhaps the most encouraging factor supporting the Columbus housing market was the promising job sector. As a strong driver of local supply and demand, Columbus’ job sector was better than the national average. The city’s unemployment rate was 4.3%, about a whole point and a half below the national average. At 4.3%, Columbus improved its unemployment rate by a staggering 2.0% in just one year.

Columbus County Map:

Columbus-county-map

Columbus Real Estate Market Summary

The Columbus real estate market appears to have weathered the Coronavirus storm slightly better than many of its national counterparts. For starters, the city’s unemployment rate remains below the national average, and home values have yet to be hit as hard as the majority of the country. As a result, there’s a good chance real estate in Columbus recovers sooner rather than later. Current Columbus real estate trends suggest the local market is slightly healthier than most others, which bodes well for every active participant: buyers, sellers, and investors.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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