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CINCINNATI FACTS

POPULATION

how quickly the courts can process evictions, this could add a significant amount of vacant rental inventory in a short amount of time. Mid- to high-priced rentals will see a drop in demand as some areas are less expensive to own than rent. Unemployment may remain elevated, reducing qualified tenants and putting further downside pressure on rents. Demand will stay elevated for SFR rentals as families relocate from cramped multifamily structures. Another challenge may be the number of “qualified” renters with no eviction or recent job loss will be signifi - cantly reduced. Landlords will likely have to lower their requirements to fill vacancies. At the same time, renters in a good financial position are converting to buyers, further reducing rental de - mand. Similar to the previous recessionary period, SFR rental rates may stagnate or drop lower until employment and wages recover. For the market to support higher rents, wages not only need to recover, but also increase above current levels, which could take several years. 2021 SFR Rent Price Forecast: -10 percent to -5 percent CONCLUSIONS Single-family homes are moderately priced verses other markets, while steadily increasing rental prices provide high yield and great cashflows. Even if there is a moderate pullback in the next one-two years, we don’t foresee price reductions as drastic as the last recession. Owners have a record amount of equity built up, and there is a myriad of government programs to work with borrowers to mitigate another foreclosure crisis. Rent prices versus income are low, which will help limit the downside in rental rates. Investors currently looking at Cincinnati MSA would be wise to factor in a potential decrease in rental income for one-two years to make sure the numbers pencil on your next investment property due to a potential surge in evictions and ongoing unemployment challenges. Bottom line, Cincinnati has stable fundamentals, low relative home prices, and historically good returns. How - ever, there are some short-term risks building between the forbearance term and eviction moratoriums expiring around the new year. Cautious investors may want to see how the market reacts after the new year, as there could be better deals next spring from distressed sales. •

The 2019 Census shows the Cincinnati Metropol - itan Statistical Area (MSA) has over 2.22 million residents and has added nearly 100 thousand residents the last 10 years, growing 3.5 percent.

JOB MARKET

The Cincinnati MSA economy is the 28th largest in the U.S. by GDP, supported by 10 Fortune 500 companies and 17 Fortune 1000 companies. Cin - cinnati’s diversified economic base has a large cohort of health and professional services, and trade/transportation jobs. Before COVID-19, the job market was steadily increasing, adding around 10 thousand new jobs per year, which is a one percent year-over-year increase. Currently, the region has around the same number employed as of September 2015.

INCOME

One-year median household income is up 6.5 percent from 2018-2019 , and up nearly 20 per- cent for the last five years as more high-wage jobs enter the marketplace. The median house - hold income of $66,825 is slightly below the national median income of $68,700. Information and statistics from the Bureau of Labor Statistics employment data, Department of Labor report, Census/ACS Tables and RentRange® data sources.

Cincinnati MSA Index: 2012 to Current

50%

50%

45%

45%

Legend

Employment Change Median Household Income Home Value Rent Price

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

0%

-5%

-5%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 -10%

-10%

Fred Heigold III is the senior data analyst at Altisource® / RentRange®, an industry leader inmarket data and analytics for the single-family rental housing industry.

72 | think realty magazine :: december 2020

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