Cincinnati area rents stabilizing as thousands of new apartments come online
Is the rent still too damn high? Yes, if you ask most renters.
But relief could be on the way thanks to a large stock of recently opened apartment buildings, and units that are planned or already under construction in the Cincinnati metro area.
Developers brought about 5,000 new apartment units online in the Cincinnati area over the past two years, and thousands more are in the pipeline for 2024, said Kurt Shoemaker, senior vice president at the real estate investment firm, CBRE Group Inc.
That includes an estimated 1,800 future apartment conversions coming from the adaptive reuse of old office buildings, such as the Carew Tower in Downtown Cincinnati, as well as hotels, warehouses and other structures, according to a recent report from market tracker, RentCafe.
That's still not enough to satisfy demand in an area with a severe affordable housing shortage and where about 60% of the metro area's population are renters.
But increasing options for renters have resulted in a slower pace of rent hikes as landlords lower asking rents and even offer move-in incentives to attract residents.
"For years, development activity was at a snail's pace coming out of the (2007-2009) recession,'' Shoemaker said. "But the last four or five years have seen a significant uptick in (apartment) construction with more product coming online and a little softening in rents.''
Rents dip in December, up about 5% for the year
The median asking rent −or the rental price listed by the landlord − for a one-bedroom apartment in the Cincinnati area dipped $13 from November to December last year to $825 − just $5 higher than the asking rent at the beginning of the year, according to figures provided by Dwellsy, an online apartment search platform.
On a year-over-year basis, one-bedroom rents rose about 5% last month compared to December 2022, but that was a marginal increase compared to previous years, Dwellsy data shows.
Cincinnati was "a pretty flat rental market in 2023,'' said Dwellsy CEO Jonas Bordo. "Hopefully, we get more of that in 2024.''
Pricing trends vary by region, and renters in Midwestern cities such as Cincinnati haven't felt the same impact on rents as their counterparts in the South and West regions, where apartment construction has been much more intense.
Markets such as Nashville and Austin have brought on so much supply that they've seen rents drop, Shoemaker said.
Meanwhile, the Cincinnati market "has returned to more normalized levels and rent growth has definitely tapered. But it's not Nashville,'' he said.
Rent growth expected to slow in 2024
Shoemaker expects rents to continue to moderate and grow only about 2% to 3% next year in Cincinnati.
The Cincinnati area is following the national trend in which the overall median U.S. asking rent fell 0.8% to $1,964 in December 2023, compared to the same month a year earlier, according to Redfin, a national real estate brokerage.
December marked the third consecutive month in which rents declined on a year-over-year basis, Redfin found.
At the same time, the number of completed apartments in the U.S. is near the highest level in more than 30 years, and the number under construction is just shy of its record high.
Notable apartment projects coming online in the Cincinnati area
Carew Tower − Developers plan to convert Downtown's iconic Carew Tower into 385 apartments at a total cost of about $175 million.
PNC Tower − The $90 million, 281-unit luxury apartment complex planned at the former PNC Tower in downtown Cincinnati would be the second phase of development in Cincinnati for Detroit-based City Club Apartments, which opened the 294-unit City Club Apartments CBD Cincinnati next door to the PNC Tower.
Arlington School − The owner of the old Arlington School at 607 Carthage Ave. in Arlington Heights plans to rehabilitate the school into 15 apartment units over the building's three levels for about $4 million.
The Jasper − Developers are planning to convert the old R.K. LeBlond Machine Tool Co. factory into a $70 million luxury apartment complex with 271 units.
Pogue − Developers are planning to covert the old Pogue's warehouse Downtown at 310 Race St. into 106 apartments.
This article originally appeared on Cincinnati Enquirer: Rents dip at end of last year bringing respite to Cincinnati renters
