After years of cities in Sun Belt states like Texas and Florida topping the list of hottest housing markets, Ohio is now home to three of America's top markets for 2024, according to Zillow (NASDAQ: ZG).
Cleveland, Columbus and Cincinnati are in the top 10. Benzinga looks at the Buckeye State and why so many people are moving there.
The Return Of The Rust Belt
In the early 20th century, Cleveland, and the state of Ohio in general, was one of America's most important economic engines. Before oil was discovered in Texas and California, Cleveland was where a young John Rockefeller began building his oil empire and massive fortune by selling kerosene. Rockefeller transported his oil to the nation via railway and Lake Erie, making Cleveland a bona fide financial powerhouse.
The Ford Motor Co. (NYSE: F) eventually built factories in Ohio, where it built one of its most iconic motors - the 351 Cleveland - at its Cleveland plant. Many of America's biggest automakers followed, including General Motors Co. (NYSE: GM), and they all had huge operations in and around Cleveland. When auto production shifted from muscle cars and the oil business moved to other states, the Cleveland area suffered severe population loss from the 1970s through the 1990s.
Throughout much of the 2000s, Cleveland was a symbol of America's industrial decline, and it became known as part of the Rust Belt because so many once vibrant factories were no more than rusting hulks. All those years of difficulty led to a housing market with flat home prices compared to the rest of the country. What that translates to in 2024 is value, with the average Cleveland home costing an affordable $230,000.
Affordability Is The Name Of The Game
Cleveland's combination of affordable housing in a large metropolitan area with ample employment opportunities and a revitalized downtown area is good for eighth place in Zillow's top 10 housing markets. Ohio's other big cities, Columbus and Cincinnati, rank two and three on the same list, respectively. The reasons why are very similar to the factors that have heated up the Cleveland housing market. They all have average single-family home prices well below the $511,000 national average.
Cincinnati offers affordable home prices, where the average single-family home in the city and nearby border states of Kentucky and Indiana checks in at a buyer-friendly $280,000. The population of 300,000 makes it just big enough to have a vibrant job market and ample options for entertainment, while not being too big for people who don't want to live in a city like Chicago or even Cleveland.
Columbus is home to Ohio State University, which is one of the nation's largest and well-respected public universities. The university is also a massive employer in the area and the average single-family home in Columbus is $311,000. Ohio State's top-ranked athletic teams also give Columbus residents the luxury of seeing future stars in a variety of sports, which only contributes to the quality of life in the city.
Strong Upside Potential
Aside from affordability, the hot real estate markets in Columbus, Cleveland and Cincinnati have another important factor in common: upside. The long-term trend for property prices in the area is swinging upward, a trend that looks set to continue for the time being. That means real estate investors may find great opportunities in the Buckeye State while everyone else is still looking at Florida, Texas and Georgia.
This trend of people moving to Ohio is part of a larger migration to the Northeast and Midwest. Buffalo, New York, was top on Zillow's list, and Indianapolis also made the top 10. People are looking for medium to large metro areas with affordable housing and solid job markets. After years of dominance, the Sun Belt now has serious competition for the title of America's hottest real estate market.