Suburban Areas Support Overall Rent Increase; Louisville Rent Growth Exceeds that of Washington DC
Columbus, Ohio, ended the second quarter with one of the strongest 12-month rent growth figures of any major apartment market in the United States.
Apartment rents in Columbus climbed 2.9% over the past year, according to CoStar data. That is among the top 10 markets in the U.S. with an inventory of at least 75,000 units.
A modest pace of completions has been a key driver of consistently strong rent growth. Around 5,800 units were completed over the past 12 months, which is 25% above the average over the same period in the five years preceding the pandemic.
The same analysis at the national level shows that 12-month completions are nearly double the pre-pandemic average. Meanwhile, the number of units newly occupied over the past year in Columbus was 19% above the pre-pandemic average.
Some of Columbus’ largest concentrations of apartment inventory, where vacancy is over 150 basis points below the market average, are driving rent growth in the market. That includes Northeast Columbus, at 4.1% rent growth, and Bexley-Whitehall, at 3.8% rent growth. The 12-month demand figure in these areas sits well above pre-pandemic levels and outpaced the number of new units added over the same period.
Downtown Columbus is the only area in the market to post negative rent growth. High vacancy and an elevated level of completions over the past 12 months have weighed on landlords’ ability to push rents higher.
Columbus will likely continue to see healthy rent gains over the near term as the construction pipeline shrinks. Persistently high interest rates have weighed on the number of new projects breaking ground, which should result in a significant slowdown in the pace of completions over the next 12 to 18 months. This may push rent growth above pre-pandemic levels in Columbus over the near term, and even the downtown Columbus area expects to see a return to positive rent growth amid healthy demand and fewer completions.