The Columbus multifamily market spent Q2 2026 absorbing the largest delivery wave in its history. Trailing 12-month deliveries reached 9,472 units, with 2026 Q2 marking the all-time peak, as supply outpaced demand for the fourth consecutive year. Vacancy sits at 10.2%, 200 basis points above the national average and the highest among Midwest peer markets, though CoStar now forecasts the cycle peak at 10.2% in 2026 Q3, suggesting the top is near. Asking rent growth slowed to 0.7% and effective rent growth to 0.1%, the weakest performance since the Global Financial Crisis, with concessions widespread across all classes. Investment volume contracted over the past 12 months. The long-term picture remains anchored by a diversified employment base and continued population growth, but operators are working through a supply cycle that won’t normalize until construction activity moderates.
Market Annual Trends
Past 12 Months | Historical = 10-year trailing average | Forecast = upcoming 12-month
- Delivered Units: 9,472 | Historical Avg: 3,971 | Forecast: 5,319 | Peak: 9,563 (2026 Q2)
- Net Absorption: 6,312 | Historical Avg: 3,236 | Forecast: 5,119 | Peak: 8,423 (2021 Q4)
- Vacancy Rate: 10.2% | Historical Avg: 7.1% | Forecast Avg: 9.9% | Forecast Peak: 10.2% (2026 Q3)
- Asking Rent Growth: 0.7% | Historical Avg: 2.0% | Forecast: 2.0% | Peak: 7.3% (2022 Q2)
- Effective Rent Growth: 0.1% | Historical Avg: 1.9% | Forecast: 1.8% | Peak: 7.8% (2022 Q2)
- Average Market Asking Rent: $1,402/unit | Effective: $1,349/unit
- Under Construction: 9,464 units across 41 properties, representing 4.0% of inventory, well above the national benchmark of 2.7% and the highest among Midwest markets
- Stabilized Vacancy: 8% (excludes properties in lease-up), up 120 basis points year-over-year; assets delivered in 2025 are only 79% leased at the point where pre-pandemic properties typically reached 90% occupancy
- New Supply Concentration: Upper Arlington led with approximately 20% of 12-month deliveries; Delaware County, Downtown Columbus, and Northeast Columbus each represented roughly 14%; mid-priced units accounted for 64% of all deliveries
- 2026 Pipeline: An estimated 7,500 units scheduled for completion this year against projected demand of 3,600 units; deliveries forecast to decline 30% in 2027 to approximately 5,200 units
- 4 & 5-Star Units: Vacancy at 11.1%; net absorption declined 26% year-over-year to roughly 2,800 units, still slightly above historical norms
- 3-Star Units: Deliveries increased 25% year-over-year to 5,300 units; vacancy hit a record 10.6%, well above the five-year average of 7%; net absorption near a record 3,200 units
- 1 & 2-Star Units: Vacancy at 8.8%; zero units under construction; net absorption of (8) units this quarter
- Concessions: 70% of urban-core properties now offering discounts, up from 50% a year ago; roughly two months of free rent has become standard among new luxury properties; downtown rents fell 1.3% annually
Class-Specific Rent Growth (12-Month):
- 4 & 5 Star: 0.2% asking rent growth | Average asking rent: $1,667/unit | Effective: $1,591/unit
- 3 Star: 0.8% asking rent growth | Average asking rent: $1,435/unit | Effective: $1,377/unit
- 1 & 2 Star: 1.5% asking rent growth | Average asking rent: $1,079/unit | Effective: $1,056/unit
Capital Markets Overview
- Total Asset Value: $35.9 billion
- 12-Month Sales Volume: $350.8 million across 119 transactions, 115 properties, and 8.9K transacted units (average deal size: 74 units)
- Market Cap Rate: 6.8%
- Market Sale Price/Unit (YOY Change): $147,587 | +4.3% year-over-year
- Average Transaction Cap Rate: 8.1% | Range: 6.0% to 12.4%
- Average Transaction Sale Price/Unit: $39.4K | Range: $17.8K to $260.4K
- Sale vs. Asking Price: -7.8% average discount
- Percent Leased at Sale: 92.1% average
- Q1 2026 Volume: Less than $50 million, a sharp year-over-year decline; the single $130.5 million institutional sale of the Quarry Apartments accounted for a substantial share of annual volume
- Private Buyers: Roughly half of sales volume over the past year, up from historical levels, while institutional buyers largely remained on the sidelines
- Value-Add Activity: The primary driver of acquisitions; Morgan Properties acquired an 11-asset Midwest portfolio including two Columbus assets, The Bradford at Easton for $61 million ($188,200/unit) and Central Park Apartments for $57 million ($177,700/unit), with plans for interior upgrades and expanded amenities.
Class-Specific Capital Metrics (Market Pricing, YTD 2026):
- 4 & 5 Star: Market Cap Rate: 6.3% | Market Sale Price/Unit: $198,808
- 3 Star: Market Cap Rate: 6.7% | Market Sale Price/Unit: $150,268
- 1 & 2 Star: Market Cap Rate: 7.4% | Market Sale Price/Unit: $97,439
Top Submarket Sales (Trailing 12 Months):
- Upper Arlington: $136.52M, 32 transactions, 7.0% cap rate, $160,051/unit
- Licking County: $57.86M, 11 transactions, 7.7% cap rate, $109,788/unit
- Southern Columbus: $50.38M, 10 transactions, 6.6% cap rate, $132,888/unit
- Downtown Columbus: $44.65M, 11 transactions, 6.4% cap rate, $229,037/unit
Takeaways
Quarter-over-Quarter vs. Q1 2026:
- The vacancy cycle appears to have topped out. After four years of climbing, vacancy ticked down from 10.4% to 10.2%, and CoStar now dates the forecast peak in 2026 Q3, exactly where the market sits today.
- Demand re-accelerated. Net absorption jumped from 4,943 to 6,312 units, running 33% above the pre-pandemic average even as deliveries hit their all-time peak this quarter.
- The pipeline is finally shrinking. Units under construction fell from over 10,000 last quarter to 9,464, and deliveries are forecast to drop sharply in 2027. The supply wave has crested, finally.
- Rents are where the pain lives now. Last quarter’s modest rent recovery reversed; effective growth is essentially flat at 0.1%, and the gap between asking and effective rents widened as concessions deepened. Workforce housing (1 & 2 Star) remains the only segment with real pricing power.
- Pricing held despite thinner volume. Sales volume slipped to $350.8M, but price per unit rose across the market and 3 Star assets, while 1 & 2 Star cap rates expanded to 7.4%. The value-add end of the market is where sellers are giving ground.
The read: absorption is strong, the delivery peak is behind us, and the pipeline is contracting. The pain now is in rents and concessions, not demand. For buyers, transaction cap rates averaging 8.1% against a 6.8% market cap rate, with sales closing an average of 7.8% below ask, is where the value-add math works.
Data Source from CoStar Group
Macro Headwind: The Iran War, Hormuz, and the Rate Path
- The ceasefire with Iran collapsed and the war continues. The closure of the Strait of Hormuz has cut off roughly a fifth of global seaborne crude, spiking oil prices in what the IEA has called the largest supply disruption in the history of the global oil market.
- The bond market repriced accordingly. Treasury yields and mortgage rates jumped in late spring, and rate cut expectations have been pushed out as energy-driven inflation risk persists.
- Expansive fiscal policy is pulling the other direction. Recent corporate and individual tax cuts inject liquidity and boost consumer demand, an accelerant that supports household formation and rent rolls but adds to the inflationary mix keeping the Fed cautious.
- Net effect for Columbus: the metro isn’t oil-dependent, but it is rate-sensitive. Sustained elevation in yields keeps cap rate compression off the table, widens construction loan spreads, and slows transaction velocity, extending the private-buyer window before institutional capital returns.
