Affordable Housing | Ohio Market Update
Affordable Housing Investments & The Ohio Economy
Ohio’s multifamily demand drivers remain firmly in place as sales volume and pricing have increased steadily through this cycle. With average cap rates ranging from 6.3% to 6.9%, out-of-market investors continue to be attracted to the higher yield that the region provides. Ohio falls in line with the national trend of increasing demand for Low-Income Housing Tax Credit (LIHTC) multifamily assets as they currently have an average sales price per unit approximately 42% less than market rate properties. Investors nationwide continue to rally around the ability to achieve market rate yields, or better, while investing in high quality assets at a deep discount to replacement cost.
Home to more than 11.7 million residents, Ohio is the seventh most populated state in the U.S. Located in the heart of the nation’s industrial region, Ohio is strategically situated along major inland waterways and crisscrossed by the 10th largest highway network in the country. Nearly 60% of the U.S. and Canadian populations are within 600 miles of the state. Chief Executive magazine ranked Ohio No. 9 in its “2019 Best States for Business,” which ranks states based on taxes and regulation, the quality of the work force, and living environment.
The Buckeye State continues to see strong growth in several sectors, including education and health services, finance, construction, manufacturing, and logistics. There are 24 Fortune 500 companies headquartered in the state, including: Cardinal Health, Goodyear Tire, Kroger, Macy’s, Nationwide, Procter & Gamble, and Progressive. Nonfarm employment in Ohio increased by 25,200 jobs, or 0.5% annualized, from July 2018 to 5.59 million payrolls in July 2019. Ohio’s unemployment rate decreased to 4.0% as of July 2019, down 60 basis points from one year ago. Total employment in Ohio is expected to increase 4.4% by 2026, a projected gain of more than 253,000 jobs.