Columbus Ohio Multifamily Market Analysis Q3 2024
Columbus’ multifamily market remains healthy and resilient in 2024, despite a high supply of new apartments and slower rent growth. Strong apartment demand has kept vacancy rates in check, even as historic levels of new units enter the market. While rent growth is more modest and vacancies have risen slightly, the city’s affordability and expanding job market continue to drive consistent housing demand. As private investors fill gaps left by institutional players, Columbus is positioned for long-term growth, balancing strong demand with an evolving supply landscape.
Vacancy Rate Decline: Columbus apartment vacancy decreased by 40 basis points to 7.9% in Q2 2024. Around 2,200 units were absorbed, 17% above the 2015-2019 average. Multifamily vacancy tightened in Columbus through the first half of 2024, signaling market stabilization following a two-year run of rising vacancy.
Slower Supply Growth: Net deliveries were 16% below pre-pandemic levels in early 2024, and a further 37% drop in deliveries is expected by year-end due to high interest rates.
Demand for Mid-Priced Units: Demand for 3-star units more than doubled pre-pandemic levels. However, vacancy remains high at 7.9%, with record supply entering the market.
High-End Units: 4 & 5 Star vacancy fell by 110 basis points, now at 9.5%, mainly due to fewer deliveries rather than strong demand.
Rent Growth: Columbus experienced a steady year-over-year rent growth of 3%, placing it among the top ten U.S. markets for rent growth.
Economic Outlook: Strong population growth and a healthy job market, particularly in advanced manufacturing, support future tightening of market conditions. However, exposure to weaker retail sectors could pose a risk if consumer spending slows.
Transaction Volume: In Q2 2024, Columbus’ real estate sales volume totaled $76 million, 52% below pre-pandemic averages for the same period.
Deal Size Decline: Large transactions ($40M-$70M range) have significantly decreased. Only 3 deals over $40 million occurred in the past 12 months, marking an 80% drop from the previous year.
Buyer Profile Shift: Institutional buyers, traditionally responsible for 20% of acquisitions, have reduced activity. Private equity funds now account for over 25% of recent deal volume.
Market Outlook: High interest rates and slowing rent growth may suppress transaction activity in the coming months. This could create opportunities for private investors to acquire discounted properties.
Source: Costar Group
