Cincinnati Rental Market Demand and Supply Trends

An odd phenomenon keeps happening: 1) Apartment rents keep growing where little new supply gets built, and yet... 2) Apartment rents keep cooling where lots of new supply gets built. Could it be all about supply and demand? 🤔 (Yes.) CRE Analyst has a great post up this morning about apartment supply cycles and the relationship with rent growth. Their research shows a MUCH HIGHER correlation between supply and rents in this cycle (98%!) than in past cycles. Why? Because 1) For the first time in 40+ years, we're building so much supply in so many markets that it's having a very clear impact on rents. And 2) Because unlike in prior cycles' supply peaks, this one is not being taken down by a recession. So in those periods (2001-02, 2009-10), rents fell not merely because of "peak" cycle supply, but primarily because demand evaporated. In this cycle, there's still strong job/wage growth. Where are the top markets for rent growth right now? They're the steady-eddy markets that never saw a demand boom and therefore (importantly) never saw a supply boom: -- Syracuse NY, Lincoln NE, Midland TX, Louisville KY, Dayton OH, Springfield MA, New Haven CT, Lexington KY ... and among larger markets: Kansas City, Washington DC, Cleveland OH, Cincinnati OH, Greensboro NC, Virginia Beach VA, Chicago IL. Where are rents falling the most right now? Well, it's NOT where demand is weak. In fact, rents are falling in some of the hottest-demand markets -- an unusual phenomenon we haven't seen in a very long time. Because while there's a ton of demand, there's even more supply -- generational highs in deliveries. -- Austin TX, Myrtle Beach SC, Daytona Beach FL, Sarasota FL, Jacksonville FL, Atlanta GA, Raleigh NC, Lakeland FL, San Antonio TX, Phoenix AZ. Now here's important context: In prior cycles, many analysts (especially investment banks) routinely whiffed on forecasts because they misunderstood the relationship between supply and demand. *** In the 2010s through 2022, we saw some markets with "high" supply rank among the national leaders for rent growth, outperforming Wall Street forecasts. How can this be given everything we just covered? It's simple: Because relative positioning (No. 1 supply market!) doesn't matter. What matters is VOLUME of supply relative to demand in a given market. Demand routinely exceeded supply volumes that looked "big" but were actually quite manageable relative to demand... and indeed, demand often exceeded supply even in the highest-supplied markets between 2010-2022. And I still think that's where we'll eventually end back up, given the recent plunge in new starts pointing to much lesser supply by 2026. At that point, the supply/rent correlation will likely drop from its current 98% just because there'll be much less supply to impact the market. But where we sit today with peak supply: Rents are slowing where supply is going in big numbers. Rents are growing where there's little supply. #apartments #housing #econ101

Cincinnati small bay vacancy sits at 1.7%. CoStar published this stat in 2023. Three years later, nothing has been built to close that gap. Here's what that actually means on the ground. When a contractor, manufacturer, or trades business needs 5,000 to 25,000 SF in Cincinnati right now, they have almost no options. They're not losing deals to competing tenants, they're losing time to a market that simply doesn't have the product. That's not a soft market signal. That's a structural supply problem. New construction hasn't solved it because the math on spec small bay development is still difficult for most operators. Land, steel, and labor costs haven't corrected enough to make ground-up pencil at rents the tenant base can absorb. Which is exactly why we're spending time/energy/money working through TIF financing on a new development site. The 1.7% vacancy rate isn't a market condition to wait out. It's a thesis to build against. Institutional capital is starting to notice Cincinnati. The window between "local operators know this" and "the big platforms price it in" is where returns actually get made. We're not waiting for that window to close. #SmallBayIndustrial #CincinnatiCRE #IndustrialRealEstate

🔥🔬 Fresh out of 🧪 Parcl Labs: 2024 US Rental Market Year-End Review In part two of our year-end research series, we analyze rental prices across major US metros using the Parcl Labs Rental Price Feed. Here are the key takeaways: 1️⃣ National Cooling & Sunbelt Strain US rents declined -0.91% YoY, now -8.26% below peak 21 of 49 metros with rental price feed coverage saw YoY declines Sunbelt markets led the downturn: 📉 Texas: Austin: -4.94% YoY, San Antonio: -3.58%, Dallas: -1.41% 📉 Florida: 7 of 10 markets down YoY 2️⃣ Midwest Markets Show Resilience Strong performance across the region: 📈 Louisville: +9.15% YoY 📈 Cincinnati: +5.38% 📈 Cleveland: +4.98% 📈 Indianapolis: +4.95% 📈 Chicago: +4.68% 3️⃣ Institutional Markets Struggled Markets where Wall Street made big rental bets showed weakness: Tampa Dallas Phoenix Atlanta Charlotte All posted negative or minimal growth in 2024 4️⃣ Growth Markets Were Geographically Diverse Markets growing in BOTH rents + home prices: 🚀 Cleveland: +4.98% rent | +8.60% sales 🚀 Providence: +4.42% rent | +7.99% sales 🚀 San Jose: +3.13% rent | +6.75% sales 🚀 Pittsburgh: +4.20% rent | +7.26% sales 5️⃣ Decline Markets Were More Concentrated 6 of 9 markets showing drops in both metrics were in Florida Austin (-4.94% rent | -6.17% sales) was the notable non-Florida decliner Want to track these trends for your market into 2025? 📑 Full analysis: link in comments 🚀 API access: link in comments #RealEstate #HousingMarket #RentalMarket

Everyone’s talking about the next hot market, but few are actually standing in it. Cincinnati is becoming the next quiet gold rush, and most people still see empty lots where opportunity is breaking ground. Here’s what’s really happening. The Uptown and Pill Hill area is exploding with new development. An $80 million mixed-use project is under construction right now with restaurants, retail, and multifamily housing within walking distance of major hospitals and the university. Jobs and enrollment are climbing, creating steady, recession-resistant demand. More healthcare workers, students, and educators all need housing close to where they work and study. While others wait for cranes and ribbon cuttings, smart investors are buying early. In real estate, the biggest appreciation happens when demand shows up before the crowd does. Pill Hill is already Cincinnati’s second-largest employment hub, with more than 75,000 employees earning over $5 billion in combined income. That is not speculation. That is data-backed demand. Developers are breaking ground all around, but timing is everything. The real wins go to those who position before the spotlight hits. If you are watching what is happening in the Midwest, this is your reminder: the next wave of opportunity does not announce itself. It is being built right now. Where do you see the next “gold rush” market forming? #RealEstateInvesting #MultifamilyInvesting #CincinnatiRealEstate #CommercialRealEstate #RealEstateDevelopment