Columbus top U.S. housing market for institutional landlords, report says
COLUMBUS, Ohio (WCMH) — Columbus and Cleveland are the top markets in the U.S. for institutional landlords, investors who own at least 500 single-family homes in their portfolios, a new report shows.
Institutional investors acquired more than 600 properties in Columbus and 203 properties in Cleveland throughout the past three months, according to research by real estate data provider Parcl Labs. Phoenix, Arizona, placed third with 183 acquisitions, Memphis, Tennessee, placed fourth with 153 and Atlanta, Georgia, placed fifth with 129.
Jason Lewis, co-founder of Parcl Labs, said acquisitions are heavily concentrated in Ohio, with the Buckeye State market accounting for 14.2% of all institutional investments nationwide. Lewis noted one in 10 U.S. single-family homes bought by institutional operators over the past three months has been in Columbus.
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“Columbus has been an epicenter of institutional activity during a period where acquisitions have typically come to a crawl,” said Lewis. “What’s notable about the Ohio markets is these operators are paying more for homes than the rest of the market.”
The statistics are significant given the U.S. housing market has witnessed a decline in institutional home-buying activity. At the height of the pandemic housing frenzy, institutional operators made up 2.4% of home purchases in Q2 2022, or 1 in every 42 home purchases. In Q2 2023, institutional landlords made up 0.4% of home purchases, or just 1 in 250 purchases.
Noel Christoper, Forbes Real Estate Council member, said in the report investors are drawn to Columbus because the market is home to high quality of living, affordability and can turn a decent profit. He noted, “While there are other cities with yield, you are sacrificing in other areas like crime, lack of income growth, outbound population.”
“Columbus right now checks a lot of boxes in that people are moving there,” said Christopher. “They are pro-business, and it is affordable to live. And [institutional operators] can deploy capital.”
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The report also pointed to Intel’s $20 billion investment in Ohio as a drawing factor. Intel announced its project to build a “mega-site” of semiconductor fabrication plants in central Ohio in January 2022. The initial unveiling of the project promised to bring at least 10,000 direct jobs and thousands more indirectly. On the one-year anniversary of the plant’s announcement, Intel revealed that the site will be called Ohio One.
Dan Hamilton, a real estate agent who runs the Cutler Real Estate office in New Albany, said in the report some of his agents have had Intel investor clients buy five to 10 properties in central Ohio throughout the past year.
“[The homebuyers] told us that they invested in Intel-areas previously whose values were around $400K to $500K at the time, where Columbus is now, and within five years of Intel being there, homes were selling in the $800s to $1 million,” Hamilton said.
Learn more and view Parcl Labs full report here.
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