|Housing Market Profiles|
| Cincinnati, Ohio
The Cincinnati metropolitan area encompasses 13 counties in southwest Ohio, northern Kentucky, and southeast Indiana. The major cities of Cincinnati, Hamilton, Middletown, and Covington had populations of 330,510, 60,218, 51,224, and 43,358, respectively, as of the 2000 Census. The Census Bureau estimates that as of July 1, 2002, the population in the area had grown by approximately 13,550 persons annually, translating to an estimated 5,000 new households. The Cincinnati area has weathered the economic downturn better than some other areas in the nation because of its industrial diversity.
Cincinnatis diverse economy has helped avoid major downturns and has helped sustain homebuilding activity throughout the metropolitan area. Unlike many economies in the Midwest region the manufacturing sector comprises only 16 percent of total employment, compared with 30 percent in services and 25 percent in wholesale trade. The three largest manufacturing sectors are machinery, transportation equipment, and food processing. The three largest nongovernment employers in the metropolitan area are the University of Cincinnati, with 14,084 employees; Proctor & Gamble Company, with 13,700 employees; and Health Alliance of Greater Cincinnati, with 13,505 employees.
Employment in the Cincinnati area increased by more than 2 percent annually from 1995 to 1998, then by less than 2 percent from 1999 to 2000. During the past 2.5 years the economy has registered a net loss of approximately 12,300 jobs. The unemployment rate during this time has remained stable, averaging 4 percent.
During the latter half of the 1990s single-family building activity increased as a result of the economic gains in the area. A record 11,073 permits for single-family homes were issued in 1999. With slower but still healthy growth in the economy single-family permit activity totaled 10,222 homes in 2001 and 10,417 in 2002. Although the economy has experienced a slowdown the continued relatively strong level of building is attributed to the affordable prices of homes in the area and low mortgage interest rates. Single-family permit activity for the first 6 months of 2003 was 2 percent greater than for the first half of 2002.
The sales market also has been very strong. According to the Greater Cincinnati Board of REALTORS® existing home sales in 2002 in the Ohio counties of Hamilton, Butler, Brown, Clermont, and Warren totaled 16,511 at an average price of $161,090. The Ohio portion of the Cincinnati metropolitan area accounts for 80 percent of sales activity for new and existing homes recorded; sales in 2002 increased 2.5 percent from the previous year and the average price increased 5 percent. Sales thus far in 2003 have been good, totaling 11,351 homes through May, only 1 percent lower than for the same period in record-setting 2002. Continued low interest rates are likely to result in another banner year. Liberty Township in Butler County and the city of Mason in Warren County were the two most active areas for sales activity in 2002.
Downtown Cincinnati is undergoing a substantial renewal. With the new Paul Brown Stadium and Great American Ballpark, the new Lois and Richard Rosenthal Center for Contemporary Arts and the Arnoff Center for the Arts, and a growing number of restaurants and entertainment, downtown living has become more appealing. Downtown Cincinnati, Incorporated, the organization charged with furthering commercial and residential development in downtown Cincinnati, believes that homeownership, particularly condominiums, is the next wave of residential development. Market response was strong for several rental projects that converted to condominiums, and an estimated 400 units in several developments are currently in the planning stages.
The rental market in the Cincinnati area has become soft over the past few years. As a result of the high volume of new rental construction and reduced demand from a slower economy and increasing numbers of renters moving to homeownership, apartment vacancy rates have risen significantly. CB Richard Ellis reports that as of December 2002 occupancy in Cincinnati had declined to 88 percent compared with 93 percent 2 years earlier. With a weaker job market and a volume of units in the construction pipeline the rental market is likely to remain soft; the average rent fell 2 percent between December 2001 and December 2002 to $641. An estimated 1,500 new apartments will be completed during 2003.
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