Ohio has a current population of nearly 12 million people. According to the Ohio Legislative Service Commission (LSC), the overall economy of the state is ranked seventh among all U.S. states. 

As with many U.S. regions during 2020 and 2021, Ohio experienced a “hot” real estate market, which was largely attributed to the COVID pandemic and very low mortgage interest rates. In 2022, real estate sales activity sharply declined as interest rates and inflation surged. Looking back at 2022, the Ohio market demonstrated moderate resiliency, as home prices still increased by approximately 4% statewide. 

Have we finally passed the peak for mortgage interest rates? Based on recent activity, it appears reasonable to be optimistic.

Here, we will look at the 10 best cities in Ohio for real estate investors to consider. As we look to 2023, the record-high mortgage interest rates are among the leading concerns in many aspects of the real estate market.

Mortgage Interest Rates

Have we finally passed the peak for mortgage interest rates? Based on recent activity, it appears reasonable to be optimistic. In their last 10 consecutive meetings, the Federal Reserve had increased rates as a means of combating record-high inflation. In their most recent meeting, the Federal Reserve chose to halt this trend. Although it remains an unknown — it seems likely that the Fed will soon begin to lower rates in the coming months.  

Key Factors & Variables Used for Assessment of the Housing Markets 

Property Appreciation: Comparing 2023 property sales prices to those from 2022. 

Local Property Taxes: Overall, property taxes in Ohio are slightly higher compared to other U.S. states. In 2022, Ohio homeowners paid an average of roughly $3,725, while the national average was $2,475; however, property taxes often differ substantially between local markets. Thus, property taxes are an important factor for our purposes — from the perspective of an investor comparing intrastate real estate markets.

Rental Inventory: Any indicators that involve the fundamentals of supply and demand. 

Economic and Financial Outlook: Some of the local information to consider includes job growth rates, unemployment rates, population growth, and others. 

Rocket Homes Real Estate classifies Akron as a “sellers” market.

Akron 

With an estimated population of 190,000, Akron is positioned between Cleveland to the north and Canton to the south. Redfin considers the Akron market as “very competitive” today with homes selling in an average of 21 days at an average price of only 1% below the list price. 

Across all types of homes, the median sales price is $125,000, with single-family homes at approximately $125,000 and about $112,000 for condos and co-ops. In analyzing the period from May 2022 to May 2023, Rocket Homes Real Estate classifies Akron as a “sellers” market. Further, the sales prices rose among homes of all sizes in Akron except for those with five bedrooms or more. 

Canton 

Home to approximately 70,000 residents, Canton spans roughly 26 square miles. Real estate in Canton is extremely affordable, with the median prices of homes averaging about $117,000.

Investors should note that the average monthly rent for many smaller units in Canton is in the $600 range. The Canton Repository’s report for May 2023 shows that the median number of days that homes remain on the market is 34.5. 

The city’s population continues slowly and steadily increase each year, which is largely attributed to abundant employment opportunities. 

Cincinnati

Positioned in the southwestern part of the state along the Kentucky border, Cincinnati’s population is an estimated 300,000. The economy in the Cincinnati region is among the state’s strongest, and the real estate market is no exception. 

Cincinnati is currently ranked ninth in Rocket Mortgage’s best cities for real estate investing. Data shows that about 55% of residents rent their homes.

The city’s population continues slowly and steadily increase each year, which is largely attributed to abundant employment opportunities. 

The median sales price for a home is near $252,000 — more than a 7% increase over 2022. The median homeowner in Cincinnati pays only $2,500 in annual property taxes. 

Cleveland

Positioned on Ohio’s northern coast along Lake Erie, Cleveland has experienced a renaissance in the past 20 years. The region’s economy is largely supported by the healthcare industry. 

Another extremely affordable market, the median sales price for a home in Cleveland is merely $110,000 and these properties typically remain on the market for 25 days. Property owners in Cleveland paid a median of $1,485 in property taxes last year. 

Some of the hottest neighborhoods include Tremont, Ohio City, and many along the lakefront — a result of gentrification.

Columbus 

Home to more than 900,000 residents, Columbus is the capital of Ohio and home to Ohio State University, which has more than 40,000 students. Investors should consider investing in rental properties for student housing in Columbus. 

The median home price is $223,000 — more than a 7% increase over 2022. With a strong economy, steady population growth, and property affordability, this city is one to consider. 

Dayton

Positioned between Cincinnati and Columbus, Dayton is home to more than 130,000 residents. The median sales price for homes is roughly $126,000, which reflects a modest 1% increase over 2022. 

Redfin describes the Dayton market as “somewhat competitive.” Homes typically sell in 26 days at prices about 2% below the listed amount. 

Lorain

A smaller city of approximately 65,000 residents, Lorain is positioned about 25 miles west of Cleveland. The median sales price of homes in May 2023 was $133,000, a solid 11% higher compared to 2022. 

The average homeowner in Lorain pays $1,991 in annual property taxes. Reports suggest that new residential construction activity is rising in Lorain. 

Parma

A densely populated far-west suburb of Cleveland, Parma has an estimated 79,000 residents. Redfin classifies Parma as a “highly competitive” real estate market and most properties sell in about seven days. 

The median sales price of homes is $186,000 and affordability is good for both buyers and renters. Investors should look for potential opportunities in Parma.  

It’s worth noting that Ohio is offering investors and developers a host of incentives to boost the availability of affordable housing.

Toledo

Located in the northwest corner of Ohio, Toledo is home to roughly 260,000 people. The city has a turbulent economic history, largely attributed to losses in manufacturing jobs.

Today, the real estate market in Toledo is very affordable. Rocket Mortgage explains that the city is ideal for investors seeking affordable rental units.  

Youngstown 

With a population of 60,000 in the city limits, Youngstown is a “rust belt” city with a difficult economic past, as the local base of manufacturing jobs eroded. However, many adjacent suburbs are thriving.

With a median sales price of $115,000, investors should expect affordability in Youngstown. Forbes explained that investors are having good results buying single-family homes in the $60,000 to $80,000 range for rental purposes. 

A recent Housing and Mortgage Markets Roundtable event generated a wealth of feedback regarding the real estate market in the region. Some of the hottest areas include Austintown, Boardman, and Warren. One expert stated that cash investors should consider this region; however, he emphasized the importance of having thoroughly performed property inspections, as many neighborhoods were uninhabited for long periods. 

The most recent report for the Ohio REALTORS summarized the environment as having a tight inventory, strong demand, and a stable economic base. 

Large Tax Credits Available Statewide

It’s worth noting that Ohio is offering investors and developers a host of incentives to boost the availability of affordable housing. The program offers 10-year tax abatements for both new construction and rehabilitation projects spanning 21 counties. 

These types of incentives further demonstrate that Ohio is a state with a housing shortfall — particularly for lower-income renters. Investors should look for updates on the Ohio Housing Finance Agency (OHFA) website. 

Ohio Property Investment Outlook 

Real estate investors looking into the Ohio market will quickly recognize that many positive fundamental indicators such as: 

• The state has a surprisingly strong economy — ranked seventh nationally. 
• Ohio is among the most affordable states both in terms of real estate and most living expenses. 
• At least 35% of the state’s residents are renters. 
• Generally, home prices are slowly, yet steadily, increasing statewide. 

The most recent report for the Ohio REALTORS summarized the environment as having a tight inventory, strong demand, and a stable economic base.