7 minutes ago, Z said:

How is something "interesting" and  "wrong?" Either way, Cincinnati's incredibly cheap real estate stands as a fact to be explained. Markets are important for understanding how human societies work. Cincinnati's only hope is understanding its place larger markets and accepting it as a basis for getting the world to value Cincinnati in some way. Circling the wagons and sharing happy talk with each other won't help Cincinnati's housing market or overall economy. But, maybe Cincinnati doesn't want others to see value in Cincinnati.....like a beaten down person who wants nothing more than to be left alone rather than face the risk of more failure. Mabye Cincinnati works as a place to hide away from the world. Still, I think there are some who can envision more in the Queen City. 

Lots of people see value in Cincinnati, it is why over 50% of the apartment transactions in 2019 were from out of state investors. Your take is "interesting" because it is so "comically wrong" However, if you have info you care to supply to the contrary, please feel free

16 hours ago, Brutus_buckeye said:

Lots of people see value in Cincinnati, it is why over 50% of the apartment transactions in 2019 were from out of state investors. Your take is "interesting" because it is so "comically wrong" However, if you have info you care to supply to the contrary, please feel free

We have clear measures of the extent to which people "value" Cincinnati....the price of its real estate and number of transactions. Those prices are an equilibrium between supply and demand. It shows how much it means to them. Residential, commercial, and industrial property in Cincinnati remain cheaper than any metro its size in America.....cheaper than than some metros that are quite a bit smaller, too. This uncomfortable fact cannot be explained away. What matters is the total value of transactions of "out of state investors" in Cincinnati apartments? That'll show to what extent those buyers are bargain hunters from more expensive markets seeking to take advantage of Cincinnati's low property values. This article bemoans the lack of transactions for apartment buildings despite local demand for decent apartments. https://rejournals.com/lack-of-inventory-only-thing-slowing-cincinnati-apartment-market/.

Move-in ready is at a big premium these days which is very evident in Cincinnati. Part of the relativity depressed values can be explained by the number of units in town needing rehab.

10 minutes ago, Z said:

We have clear measures of the extent to which people "value" Cincinnati....the price of its real estate and number of transactions. Those prices are an equilibrium between supply and demand. It shows how much it means to them. Residential, commercial, and industrial property in Cincinnati remain cheaper than any metro its size in America.....cheaper than than some metros that are quite a bit smaller, too. This uncomfortable fact cannot be explained away. What matters is the total value of transactions of "out of state investors" in Cincinnati apartments? That'll show to what extent those buyers are bargain hunters from more expensive markets seeking to take advantage of Cincinnati's low property values. This article bemoans the lack of transactions for apartment buildings despite local demand for decent apartments. https://rejournals.com/lack-of-inventory-only-thing-slowing-cincinnati-apartment-market/.

 

There's a lack of supply in just about every major metro, not just Cincinnati. So I'm not sure how your article proves anything, other than that there is lots of pent-up demand--which is a good problem to have. 

 

Also, the bolded part of your statement is hogwash. The median existing home price in Cincinnati is higher than in Cleveland, Detroit, Buffalo, Indianapolis, Kansas City, Memphis, Oklahoma City, Pittsburgh, or St. Louis--just to name a few. That's according to Kiplinger's latest data.

38 minutes ago, DEPACincy said:

 

There's a lack of supply in just about every major metro, not just Cincinnati. So I'm not sure how your article proves anything, other than that there is lots of pent-up demand--which is a good problem to have. 

 

Also, the bolded part of your statement is hogwash. The median existing home price in Cincinnati is higher than in Cleveland, Detroit, Buffalo, Indianapolis, Kansas City, Memphis, Oklahoma City, Pittsburgh, or St. Louis--just to name a few. That's according to Kiplinger's latest data.

The article suggests that there is a low number of apartment building sales in Cincinnati, so 50% of a small number of transactions is not necessarily significant. It supports the idea that outsiders buying in Cincinnati are bargain hunting for income properties, not buying property that they think will increase in value. Buffalo?! Memphis?! Comparing Cincinnati to smaller metros that are amongst the most troubled in the country?! Talk about damning with faint praise...Again, circling the wagons and pretending that Cincinnati is not drifting downward, that it's not in trouble, is not the answer. Detroit, Pittsburgh, and St. Louis have significantly higher populations and are all troubled metros, too.  Cincinnatians' defensiveness is the single biggest cause of Cincinnati's problems, not any failure of outsiders to appreciate it's heritage and special sense of place. Cincinnatians are responsible for Cincinnati. 

Edited April 20, 20205 yr by Z

24 minutes ago, Z said:

The article suggests that there is a low number of apartment building sales in Cincinnati, so 50% of a small number of transactions is not necessarily significant. It supports the idea that outsiders buying in Cincinnati are bargain hunting for income properties, not buying property that they think will increase in value. Buffalo?! Memphis?! Comparing Cincinnati to smaller metros that are amongst the most troubled in the country?! Talk about damning with faint praise...Again, circling the wagons and pretending that Cincinnati is not drifting downward, that it's not in trouble, is not the answer. Detroit, Pittsburgh, and St. Louis have significantly higher populations and are all troubled metros, too.  Cincinnatians' defensiveness is the single biggest cause of Cincinnati's problems, not any failure of outsiders to appreciate it's heritage and special sense of place. Cincinnatians are responsible for Cincinnati. 

 

LOL what a weird thing to be obsessed with. 

 

You said that real estate was cheaper than any metro its size in the country. I just gave you a list of metros between 1 million and 5 million that are cheaper, and there are several more that fit the bill. Your statement was a lie. 

 

Btw, Pittsburgh and St. Louis do not have "significantly higher populations." Cincinnati has 2.2 million people. Pittsburgh has 2.3 million. St. Louis has 2.8 million.

 

And why did you jump on those particular comparisons but ignore Indianapolis, Cleveland, Kansas City, and Oklahoma City?

1 hour ago, DEPACincy said:

 

There's a lack of supply in just about every major metro, not just Cincinnati. So I'm not sure how your article proves anything, other than that there is lots of pent-up demand--which is a good problem to have. 

 

Also, the bolded part of your statement is hogwash. The median existing home price in Cincinnati is higher than in Cleveland, Detroit, Buffalo, Indianapolis, Kansas City, Memphis, Oklahoma City, Pittsburgh, or St. Louis--just to name a few. That's according to Kiplinger's latest data.

 

I'm glad you wrote this, because I was also very confused about how a shortage of inventory was being spun as part of a narrative involving depressed prices.  If there is a shortage of inventory, then investors and developers will find a way to get more inventory onto the market, unless they are actively prevented by local ordinances.  That latter thing is something that could give real teeth to Z's thesis about insiders actively trying to keep prices down--if they deliberately imposed restrictions on the prices, quantities, and/or characteristics of units that developers want to build.  But I'm really struggling with the notion that Cincinnati elites are failing to "sell" Cincinnati multi-family residential possibilities.

1 hour ago, GCrites80s said:

Move-in ready is at a big premium these days which is very evident in Cincinnati. Part of the relativity depressed values can be explained by the number of units in town needing rehab.

 

It takes several months if not a full year to do a gut rehab.  That takes "inventory" off the market.  So when an area gets hot, its inventory goes down by a few percentage points, causing prices to spike.  Fools rush in and now we have plenty of flippers all over the country caught with their pants down.  

34 minutes ago, DEPACincy said:

 

LOL what a weird thing to be obsessed with. 

 

You said that real estate was cheaper than any metro its size in the country. I just gave you a list of metros between 1 million and 5 million that are cheaper, and there are several more that fit the bill. Your statement was a lie. 

 

Btw, Pittsburgh and St. Louis do not have "significantly higher populations." Cincinnati has 2.2 million people. Pittsburgh has 2.3 million. St. Louis has 2.8 million.

 

And why did you jump on those particular comparisons but ignore Indianapolis, Cleveland, Kansas City, and Oklahoma City?

Who's "obsessed"? This forum is about housing markets. Comparing a city to Cleveland, Oklahoma City, or Kansas City is tantamount to saying 'Look, we aren't the absolute worst housing markets, there are housing markets that are worse." It's dancing around the fact that Cincinnati's housing market is very weak and that property in Cincinnati is seriously undervalued. 

28 minutes ago, Gramarye said:

 

I'm glad you wrote this, because I was also very confused about how a shortage of inventory was being spun as part of a narrative involving depressed prices.  If there is a shortage of inventory, then investors and developers will find a way to get more inventory onto the market, unless they are actively prevented by local ordinances.  That latter thing is something that could give real teeth to Z's thesis about insiders actively trying to keep prices down--if they deliberately imposed restrictions on the prices, quantities, and/or characteristics of units that developers want to build.  But I'm really struggling with the notion that Cincinnati elites are failing to "sell" Cincinnati multi-family residential possibilities.

My argument is that Cincinnati's elite is not interested in selling Cincinnati...period. They don't want new people, businesses, capital, ideas, or investors muscling in on the nice little operation they've got going here. They don't care about low prices because they take their cut off the top and leave the rest to the locals who'll accept anything. 

Edited April 20, 20205 yr by Z

38 minutes ago, Gramarye said:

 

I'm glad you wrote this, because I was also very confused about how a shortage of inventory was being spun as part of a narrative involving depressed prices.  If there is a shortage of inventory, then investors and developers will find a way to get more inventory onto the market, unless they are actively prevented by local ordinances.  That latter thing is something that could give real teeth to Z's thesis about insiders actively trying to keep prices down--if they deliberately imposed restrictions on the prices, quantities, and/or characteristics of units that developers want to build.  But I'm really struggling with the notion that Cincinnati elites are failing to "sell" Cincinnati multi-family residential possibilities.

 

His thesis is really quite silly. Cincinnati has been working to loosen zoning restrictions and there's more zoning reform in the works right now. There's no evidence that Cincinnati "elites" have made it hard for outside investors.

15 minutes ago, Z said:

My argument is that Cincinnati's elite is not interested in selling Cincinnati...period. They don't want new people, businesses, capital, ideas, or investors muscling in on the nice little operation they've got going here. They don't care about low prices because they take their cut off the top and leave the rest to the locals who'll accept anything. 

 

17 minutes ago, Z said:

Who's "obsessed"? This forum is about housing markets. Comparing a city to Cleveland, Oklahoma City, or Kansas City is tantamount to saying 'Look, we aren't the absolute worst housing markets, there are housing markets that are worse." It's dancing around the fact that Cincinnati's housing market is very weak and that property in Cincinnati is seriously undervalued. 

 

Why is it unfair to compare Cincinnati to Cleveland, Oklahoma City, or Kansas City?

 

Cincinnati MSA is #30 in the country in size.  Kansas City is #31. Cleveland is #34.  Oklahoma City is #41.  They're generally non-landlocked interior metro areas, otherwise comparable in many ways.  What are you arguing that Cincinnati should be compared to?  @Brutus_buckeye has given you some significant counterevidence about institutional investor interest in many forms of real estate in the Cincinnati area, and @DEPACincy points out that median home sales price is effectively in the middle of pack (which is about where you'd expect).  Your own article talked about a shortage of multifamily units in the city, which means that someone is interested.

 

Also, I'm not sure what you even mean by elites not "selling" Cincinnati.  It's rare that a major company or institutional investor is attracted by flowery marketing materials.  Yes, you are correct, they want bargains.  Those outside investors do not have any kind of civic loyalty to Cincinnati and shouldn't be expected to.  What kind of "selling" do you even want to see?

 

  

5 minutes ago, Z said:

 

What are these percentages?

 

If Cincinnati is such an amazing place to be a landlord, why not start your own portfolio?

13 minutes ago, Z said:

Who's "obsessed"? This forum is about housing markets. Comparing a city to Cleveland, Oklahoma City, or Kansas City is tantamount to saying 'Look, we aren't the absolute worst housing markets, there are housing markets that are worse." It's dancing around the fact that Cincinnati's housing market is very weak and that property in Cincinnati is seriously undervalued. 

 

I was responding to a very specific point that you made. A claim that Cincinnati had the cheapest housing in the country of any metro its size. That's not only false, it isn't even close to being true. We have a similarly sized metro right here in the same state with cheaper housing. And I don't know where you're getting your information, but the Oklahoma City and Kansas City housing markets aren't struggling. Median sales price is not the only measure of a housing market. Hartford, CT has an extremely high median price. Real estate is expensive there because of its location in the middle of the Bos-Wash corridor. But the housing market is anything but healthy. 

17 minutes ago, Z said:

My argument is that Cincinnati's elite is not interested in selling Cincinnati...period. They don't want new people, businesses, capital, ideas, or investors muscling in on the nice little operation they've got going here. They don't care about low prices because they take their cut off the top and leave the rest to the locals who'll accept anything. 

 

I'd also like to know what you'd have the "elite" do to sell the city? And while we're at it, who exactly are the "elite" anyway? 

The "elite" is behind 3CDC, which is largely responsible for any good press Cincinnati has received for its redevelopment of OTR. They need creative people from outside Cincinnati to come in and work for them (either directly or for businesses that support them). Sure, P&G doesn't want Nestle to move their headquarters to Cincinnati. But they certainly want more creatives and college educated people to move to Cincinnati and advance their marketing firms, logistics firms, etc.

48 minutes ago, ryanlammi said:

The "elite" is behind 3CDC, which is largely responsible for any good press Cincinnati has received for its redevelopment of OTR. They need creative people from outside Cincinnati to come in and work for them (either directly or for businesses that support them). Sure, P&G doesn't want Nestle to move their headquarters to Cincinnati. But they certainly want more creatives and college educated people to move to Cincinnati and advance their marketing firms, logistics firms, etc.

Over the last 5 or so years I have seen a lot of the development momentum shift away from 3CDC and there have been complaints that they are sometimes too much of a constraint on development (they know this, which is why their activity north of Liberty Street has often been to acquire, stabilize and sell instead of retain and develop.

 

Community Development Corporations across the city are largely trying to replicate parts of 3CDC's approach to varying degrees of success. Walnut Hills/East Walnut Hills is the most obvious example but College Hill, Madisonville, Northside, among others are starting to see more diversified real estate plays in and around their business districts.

 

Circa 2013-2017 I definitely would have agreed with the "elites" narrative and while there is still considerable influence in established leadership circles, there's a recognition that outside talent and more organic growth is needed.

 

It's allowed the city's DCED (Dept of Community and Economic Development) to lead on things like eliminating parking (and potentially density) minimums and surprisingly for more out-of-town developers to do projects in the city.

So there were some interesting figures I look at each year, and they are not necessarily public info, so I can't share them, but they talk about the development pipeline vs vacancy in various peer cities vs rent growth. It examined the development pipeline in Cincinnati, Cbus, Cleveland, Indy, Nashville. It shows what the current market vacancy is, the development projects in the works,  and what expected market vacancy will be once the product is absorbed on the market (equilibrium).

Pretty much, generally speaking, Nashville is developing apartments at a rapid pace, Columbus is too, but not nearly as fast as Nashville. Indy is a bit slower and Cincy and Cleveland are developing new product slower. Now, the interesting thing is that the absorption rate in Cincinnati and Cleveland on new product was higher and vacancy rates rose less than in Columbus and Nashville for example. Yes, there was less new product coming to the market place but what was coming was filling up a lot quicker. What it is saying is that there was much more speculative building going on in the Nashville or Columbus market than Cincinnati or Cleveland. The downside, was that the Columbus and Nashville properties took longer to fill and there was more risk associated with those projects in those cities. 

 

Call it "elites stopping development" or just more institutional money flowing into those marketplaces, the new product is less in the more mature cities like Cincy and Cleve. Part of the reasoning was that these cities built out more in the 1960s through 80s and therefore, there is a lot of product that is or has been renovated through the years to stay market competitive. Not the same as new but you have more of that in the older market that can be renovated. this does not count as new product obviously, yet trades to out of town investors just as new product does. 

 

Fact is, Columbus is generating more new units (ground up)  than Cincinnati, but that does not mean that there is no investment in Cincinnati in multi family, or even renovation of existing product (which is not included in the number) There is a lower risk model in Cincinnati than Columbus but the overall returns are just as strong.

Dayton seems to be doing a decent job at getting outside investors currently. Much of downtown's redevelopment is being driven by folks from Columbus, but there is also a large presence from Louisville, and Cross Street Partners out of Baltimore is a stakeholder in the Arcade. Curiously, there doesn't appear to be much coming online from Cincinnati developers up here.

9 minutes ago, BigDipper 80 said:

Dayton seems to be doing a decent job at getting outside investors currently. Much of downtown's redevelopment is being driven by folks from Columbus, but there is also a large presence from Louisville, and Cross Street Partners out of Baltimore is a stakeholder in the Arcade. Curiously, there doesn't appear to be much coming online from Cincinnati developers up here.

Dayton is a good market if you are looking to get yield right now. Cincinnati and Columbus are very hot markets right now and investors have driven up prices in those markets. The I-670 corridor allows people to get a similar property you would have in Cincinnati or Columbus for a much more affordable price and rents are typically lower there bay around $75-$150 per door. Investors can get in at lower price points and work to drive rents in Dayton. Whereas Cincinnati and Columbus are much more challenging markets to break into. 

2 hours ago, Brutus_buckeye said:

Yes, there was less new product coming to the market place but what was coming was filling up a lot quicker. What it is saying is that there was much more speculative building going on in the Nashville or Columbus market than Cincinnati or Cleveland. The downside, was that the Columbus and Nashville properties took longer to fill and there was more risk associated with those projects in those cities. 

 

Never mind official statistics - you can take a 90-minute drive around Nashville and see that it doesn't have anywhere near the quantity of B-grade apartment complexes from the 1960s-80s that Cincinnati has.  It doesn't have the 1920s-1960s duplexes and 4-families, either.  

 

Another big reason why the rent is lower in Ohio than in the South is because 99% of homes and small multi-families have basements and several thousand people in Cincinnati and Columbus are living in improvised basement apartments. Austin doesn't have basements.  Nashville doesn't have basements.  That means they can't have basement apartments.  

 

 

 

 

6 minutes ago, jmecklenborg said:

 

Never mind official statistics - you can take a 90-minute drive around Nashville and see that it doesn't have anywhere near the quantity of B-grade apartment complexes from the 1960s-80s that Cincinnati has.  It doesn't have the 1920s-1960s duplexes and 4-families, either.  

 

Another big reason why the rent is lower in Ohio than in the South is because 99% of homes and small multi-families have basements and several thousand people in Cincinnati and Columbus are living in improvised basement apartments. Austin doesn't have basements.  Nashville doesn't have basements.  That means they can't have basement apartments.  

 

 

 

 

There is a lot to be said about that. Columbus and Nashville did not develop until later. In a way, while they are growing fast, they are still catching up to Cincinnati and Cleveland. 

21 hours ago, DEPACincy said:

 

I'd also like to know what you'd have the "elite" do to sell the city? And while we're at it, who exactly are the "elite" anyway? 

Every society has an elite. It's just part of human society. But human societies vary greatly and elites therefore vary greatly. This explains how power has generally worked in America.  https://whorulesamerica.ucsc.edu/power/class_domination.html. Cincinnnati's elite is dominated by extended families as befits a clannish and traditional place. It functions like a non-violent mafia is many ways. The Joseph Family, the Castellinis?,the Lindners,  and others who are invested mostly in local real estate. While such powerful families may not be entirely without power in other older stagnant metros, but such political/economic dynasties simply don't exist in the fastest growing metros. Not even in Columbus or Indianapolis. Their elites are more diverse and visible. Columbus' elite is who you'd expect it to be...the c-suite of the metros largest corporations and key administrators at OSU. The recent fall of Les Wexler in Columbus is a perfect example of what happens when someone attempts to dominate a growing city. Their efforts fail because personal loyalties don't matter when there's much more at stake economically with all the growth opportunities happening. Personal loyalties have more power when the pie isn't growing and the only opportunity for personal enrichment come from dividing the pie different. That's how Cincinnati works. 

16 hours ago, jmecklenborg said:

 

Never mind official statistics - you can take a 90-minute drive around Nashville and see that it doesn't have anywhere near the quantity of B-grade apartment complexes from the 1960s-80s that Cincinnati has.  It doesn't have the 1920s-1960s duplexes and 4-families, either.  

 

Another big reason why the rent is lower in Ohio than in the South is because 99% of homes and small multi-families have basements and several thousand people in Cincinnati and Columbus are living in improvised basement apartments. Austin doesn't have basements.  Nashville doesn't have basements.  That means they can't have basement apartments.  

 

 

 

 

Making excuses for Cincinnati's stagnation is part of it's problem. It discourages people from seeing it as it really is. 

18 hours ago, Brutus_buckeye said:

Dayton is a good market if you are looking to get yield right now. Cincinnati and Columbus are very hot markets right now and investors have driven up prices in those markets. The I-670 corridor allows people to get a similar property you would have in Cincinnati or Columbus for a much more affordable price and rents are typically lower there bay around $75-$150 per door. Investors can get in at lower price points and work to drive rents in Dayton. Whereas Cincinnati and Columbus are much more challenging markets to break into. 

There is no evidence that investors "drive rents in Dayton." Places are easier or harder to "break into" because they are more appealing places to invest. You seem to think that low property values are an advantage for metro areas. They may benefit individual investors, but they are a measure of a metros failure as an economy. 

21 hours ago, ryanlammi said:

The "elite" is behind 3CDC, which is largely responsible for any good press Cincinnati has received for its redevelopment of OTR. They need creative people from outside Cincinnati to come in and work for them (either directly or for businesses that support them). Sure, P&G doesn't want Nestle to move their headquarters to Cincinnati. But they certainly want more creatives and college educated people to move to Cincinnati and advance their marketing firms, logistics firms, etc.

3cdc is not under the control of Cincinnati's local elite. The Jospehs and Linders resent it muscling on their territory. 3CDC is an example of What Cincinnati would be like more generally if its elite just got out of the way. In a growing city the c-suite of the biggest local companies would be the most influential in the area, but not in Cincinnati. A lack of growth means that there is little reason for anyone to WANT to have influence in Cincinnati. This leaves it open to those who don't care about getting a share of growth and instead are motivated by creating a defensive P & G is increasingly buying whole companies and running them as separate operations in distant cities because it can't get the best people to come to city that they see as a professional dead end. They have to buy their way into labor markets in more successful cities, today.

digitalcommerce360.com/2020/01/10/procter-gamble-acquires-womens-shaving-supply-retailer-billie/

mediapost.com/publications/article/331564/pg-buys-small-personal-products-company-called-l.html

 

27 minutes ago, Z said:

There is no evidence that investors "drive rents in Dayton." Places are easier or harder to "break into" because they are more appealing places to invest. You seem to think that low property values are an advantage for metro areas. They may benefit individual investors, but they are a measure of a metros failure as an economy. 

There are certainly many macro concepts at play that hold the Dayton area back, but within each metro there are good pockets and bad pockets. If you are going to invest in Dayton and know nothing about the area and you invest in NW Dayton, you are likely not going to see much of a return for your efforts. If you go along the 670 corridor where there is growth because of the employment drivers of Wright Pat and Warren County/Cincy Burbs, you have a much stronger area and demand drivers. It is all about location. 

 

Also, there are certain fundamentals in apartment investing in markets where you can get good yield but not as much appreciation. For example, if you invest in Denver, you will likely have a negative yield on your money but you hope to make it up in 5 years because it will appreciate. If you invest in Cincinnati or Columbus, you will likely have some positive yield and then you can couple that with price appreciation. If you invest in say Detroit, you get a lot of yield but your property will stay the same or even go down in value. Dayton fits the Detroit model a bit. At the same time, investors in Dayton are still getting solid assets and good returns on their money, this is why they are purchasing there from out of town. These were investors who started looking in Cincinnati and Columbus but the prices were too high so they moved to Dayton.

35 minutes ago, Z said:

3cdc is not under the control of Cincinnati's local elite.

 

It absolutely it. It was created and funded by Cincinnati's Fortune 500 companies who realized that having a dead downtown was hurting them, and that Cincinnati needed to have a thriving live/work/play downtown in order for them to attract and retain quality employees.

 

35 minutes ago, Z said:

P & G is increasingly buying whole companies and running them as separate operations in distant cities because it can't get the best people to come to city that they see as a professional dead end.

 

From what I understand, after P&G acquired Gillette in 2005, they were unable to convince many Gillette employees to relocate from Boston to Cincinnati. This was a big wake up call for P&G execs and is what caused them to fully get behind 3CDC's mission to revitalize downtown.

 

35 minutes ago, Z said:

The Jospehs and Linders resent it muscling on their territory.

 

The Josephs own the former Chiquita Center and a bunch of surface parking lots that generate so much cash flow, they have little incentive to develop them. Carl Lindner III is focused on building a soccer stadium and surrounding development which will likely be entertainment-focused (bars/restaurants/parking). I don't think either family has much interest in developing residential.

22 hours ago, Gramarye said:

 

 

Why is it unfair to compare Cincinnati to Cleveland, Oklahoma City, or Kansas City?

 

Cincinnati MSA is #30 in the country in size.  Kansas City is #31. Cleveland is #34.  Oklahoma City is #41.  They're generally non-landlocked interior metro areas, otherwise comparable in many ways.  What are you arguing that Cincinnati should be compared to?  @Brutus_buckeye has given you some significant counterevidence about institutional investor interest in many forms of real estate in the Cincinnati area, and @DEPACincy points out that median home sales price is effectively in the middle of pack (which is about where you'd expect).  Your own article talked about a shortage of multifamily units in the city, which means that someone is interested.

 

Also, I'm not sure what you even mean by elites not "selling" Cincinnati.  It's rare that a major company or institutional investor is attracted by flowery marketing materials.  Yes, you are correct, they want bargains.  Those outside investors do not have any kind of civic loyalty to Cincinnati and shouldn't be expected to.  What kind of "selling" do you even want to see?

 

  

 

What are these percentages?

 

If Cincinnati is such an amazing place to be a landlord, why not start your own portfolio?

Exactly! If Cincinnati is so appealing, why is there still so little demand? Why are rents still so low and investment so limited in rental properties in Cincinnati? That's just the kind of question we should be asking?

8 minutes ago, Z said:

Exactly! If Cincinnati is so appealing, why is there still so little demand? Why are rents still so low and investment so limited in rental properties in Cincinnati? That's just the kind of question we should be asking?

Rents low in Cincinnati compared to what?? Columbus?? Cleveland, Indy?? or NY, San Fran, Boston or DC?

 

This is such a vague statement. Cincinnati rents are in line with other peer Midwestern cities. It is not like the market in Indy and Columbus is significantly higher. that is a fallacy. 

 

If you compare rents to DC, NYC, Boston, San Fran, of course you have much higher rents there. Those cities, especially, NYC and San Fran are landlocked and real estate is at a premium. They are much larger too. You are comparing apples to oranges there. Not a good comparison

2 minutes ago, taestell said:

 

It absolutely it. It was created and funded by Cincinnati's Fortune 500 companies who realized that having a dead downtown was hurting them, and that Cincinnati needed to have a thriving live/work/play downtown in order for them to attract and retail quality employees.

 

 

From what I understand, after P&G acquired Gillette in 2005, they were unable to convince many Gillette employees to relocate from Boston to Cincinnati. This was a big wake up call for P&G execs and is what caused them to fully get behind 3CDC's mission to revitalize downtown.

 

 

The Josephs own the former Chiquita Center and a bunch of surface parking lots that generate so much cash flow, they have little incentive to develop them. Carl Lindner III is focused on building a soccer stadium and surrounding development which will likely be entertainment-focused (bars/restaurants/parking). I don't think either family has much interest in developing residential.

Exactly. Why bother with investment and trying to increase property values when you can just take your cut off the top? Cincinnati's familial clans AREN'T interested in actually investing or developing the value of any properties in Cincinnati. That's my point. It's all the easier to play the game their playing when you don't have outsiders threatening to invest and increase the value of properties that might then compete with your operations. P&G isn't trying to incorporate its new purchases into its Cincinnati operations anymore because of their experience with Gillette. They let their new purchases continue to operate their separate R&D and PR from SF, Belgium, and other distant locales from which they'd never be able to lure top talent. The one time Cincinnati's biggest employers DID exercise power in Cincinnati was when they took advantage of the temporary political vacuum after the riots to try and exercise some influence in Cincinnati..creating 3cdc. The local players had no interest in 3cdc. Cincinnati's clans are rent-seekers, not actual property investors. Lindner is a perfect example. He let someone else take the actual risk of meaningful new development, 3cdc, and then sets up a subsidized deal from which he gets his cut. He doesn't have to find a way to make an legitimate profit from the deal. He doesn't have to actually risk anything. If he fails, he just carries on. These dynamics are not entirely absent from some other stagnant or slow-growing American metros, but they completely dominate Cincinnati. St. Louis, for example, exhibits some of this, too. But, virtually all Cincinnati's real estate market. with the glaring exception of 3cdc, is an exercise in rent-seeking by local familial clans. It all very different from the much more profit-driven dynamics of Columbus that unceremoniously jettisoned the closest it has to Cincinnati's clan, Lex Wexner, the moment he became a liability. Cincinnati runs on inter-personal loyalty. Columbus runs on market-based transactions. 

8 minutes ago, Brutus_buckeye said:

Rents low in Cincinnati compared to what?? Columbus?? Cleveland, Indy?? or NY, San Fran, Boston or DC?

 

This is such a vague statement. Cincinnati rents are in line with other peer Midwestern cities. It is not like the market in Indy and Columbus is significantly higher. that is a fallacy. 

 

If you compare rents to DC, NYC, Boston, San Fran, of course you have much higher rents there. Those cities, especially, NYC and San Fran are landlocked and real estate is at a premium. They are much larger too. You are comparing apples to oranges there. Not a good comparison

https://www.apartmentlist.com/rentonomics/national-rent-data/

Cleveland has the highest rental prices in Ohio:

https://www.zumper.com/blog/rental-price-data/

 

Cleveland also had the largest YOY % increase:

Business Report: Cleveland had highest rent growth among top 100 cities in 2019

 

Cleveland ranked No. 1 in year-over-year rent growth for one-bedroom units. This year, median rent for a one-bedroom unit rose 16%, to $940. The rate for a two-bedroom unit jumped 14.9%, to $1,000.

 

https://www.cleveland.com/business/2019/12/report-cleveland-had-highest-rent-growth-among-top-100-cities-in-2019.html

 

 

1 hour ago, Z said:

3cdc is not under the control of Cincinnati's local elite.

 

Bob Castellini is on the board of 3CDC.

2 hours ago, Z said:

Cincinnnati's elite is dominated by extended families as befits a clannish and traditional place. It functions like a non-violent mafia is many ways. The Joseph Family, the Castellinis?,the Lindners,  and others who are invested mostly in local real estate. While such powerful families may not be entirely without power in other older stagnant metros, but such political/economic dynasties simply don't exist in the fastest growing metros.

 

This is just stupid. The Joseph family owns a bunch of car dealerships and parking lots. They're not part of the elite. They're looked down upon by actual elites with actual power. 

 

And it's stupid to say that powerful, wealthy families don't exist everywhere. I've lived in a lot of places and I can assure you it is no different in other places. In DC, it is the Lerners, Rubensteins, and Snyders. In Philly, it is the Rosenthals, Roberts', Dorrances, and Perelmans. People in every city could come up with a similar list of powerful families. And in every place there are conspiracy theorists like you who believe the wealthy families are conspiring to hold the city back for their personal benefit. 

38 minutes ago, DEPACincy said:

 

This is just stupid. The Joseph family owns a bunch of car dealerships and parking lots. They're not part of the elite. They're looked down upon by actual elites with actual power. 

 

And it's stupid to say that powerful, wealthy families don't exist everywhere. I've lived in a lot of places and I can assure you it is no different in other places. In DC, it is the Lerners, Rubensteins, and Snyders. In Philly, it is the Rosenthals, Roberts', Dorrances, and Perelmans. People in every city could come up with a similar list of powerful families. And in every place there are conspiracy theorists like you who believe the wealthy families are conspiring to hold the city back for their personal benefit. 

The truth sometimes hurt. Owning car dealerships and parking lots on the most expensive land in a stagnant metro are enough to be part of its local elite. Philly is a great example. It's old, stagnant, and un-innovative. It has benefited modestly from it's access to NYC and the northeast corridor in recent years, but it helps to make my point. Austin, Nashville, Denver, Portland, Columbus, Indy, Minneapolis, etc. aren't dominated by family clans. Wealthy families aren't 'conspiring' they're pursuing their interests. I'm reminded that many don't understand how markets and socioeconomic classes were created and operate. Purely rationalist views of human nature don't explain human society. Read some Marx to see how capitalism works. 

53 minutes ago, DEPACincy said:

 

Bob Castellini is on the board of 3CDC.

Once he saw how powerful it was becoming in Cincinnati..and once 3cdc saw the limits of what they could do without at least token support from the local elite. 

1 hour ago, Clefan98 said:

Cleveland has the highest rental prices in Ohio:

https://www.zumper.com/blog/rental-price-data/

 

Cleveland also had the largest YOY % increase:

Business Report: Cleveland had highest rent growth among top 100 cities in 2019

 

Cleveland ranked No. 1 in year-over-year rent growth for one-bedroom units. This year, median rent for a one-bedroom unit rose 16%, to $940. The rate for a two-bedroom unit jumped 14.9%, to $1,000.

 

https://www.cleveland.com/business/2019/12/report-cleveland-had-highest-rent-growth-among-top-100-cities-in-2019.html

 

 

An increase from $1 to $2 is 50%. You still only have $2. Starting from a low price means that even modest increases in investment can lead to big percentage increases. I'll admit that that is a good bet for small investors who can't compete with institutional investors in other metros where prices are too high. 

Let's steer the conversation back away from whose who's who to use.

 

You're saying the Cincinnati housing market is undervalued.  You still haven't said what you think it should be, and why it should be higher than other peer midsized Midwestern metros.  Or why you think that's the wrong peer group for comparison (though I noted how close many of the others cited were in the MSA size rankings).  You're just saying it's undervalued because Cincinnati is apparently run by people you don't like.  Sorry, but that's not evidence, and you seem impervious to just about any amount of quantitative or qualitative arguments to the contrary.

Unless this happens all the time and I didn't notice it until now, someone/some people are dumping section 8-qualified rental homes on the Cleveland west side. Seemingly occupied homes up for sale in the $40-80k range. I wonder if they are still collecting rent.

22 minutes ago, Z said:

An increase from $1 to $2 is 50%. You still only have $2. Starting from a low price means that even modest increases in investment can lead to big percentage increases. I'll admit that that is a good bet for small investors who can't compete with institutional investors in other metros where prices are too high. 

 

(1) An increase from $1 to $2 is 100%.

 

(2) These market percentages go on aggregate numbers.  So you can still have small percentage increases even on small bases because if you have 10 widgets in a market for sale at $1 each, and then someone increases the price of their extra-special widget to $2, that widget has increased in price by 100%, but the total widget price level in the market has only increased by 10%, now with its new mix of workforce widgets and luxury widgets.

19 minutes ago, Gramarye said:

Let's steer the conversation back away from whose who's who to use.

 

You're saying the Cincinnati housing market is undervalued.  You still haven't said what you think it should be, and why it should be higher than other peer midsized Midwestern metros.  Or why you think that's the wrong peer group for comparison (though I noted how close many of the others cited were in the MSA size rankings).  You're just saying it's undervalued because Cincinnati is apparently run by people you don't like.  Sorry, but that's not evidence, and you seem impervious to just about any amount of quantitative or qualitative arguments to the contrary.

This suggests that Cincinnati housing prices should be about 16 percent higher.https://www.stlouisfed.org/publications/housing-market-perspectives/2018/us-housing.

 

1 minute ago, Gramarye said:

 

(1) An increase from $1 to $2 is 100%.

 

(2) These market percentages go on aggregate numbers.  So you can still have small percentage increases even on small bases because if you have 10 widgets in a market for sale at $1 each, and then someone increases the price of their extra-special widget to $2, that widget has increased in price by 100%, but the total widget price level in the market has only increased by 10%, now with its new mix of workforce widgets and luxury widgets.

Yes, Cincinnati's aggregate house prices are low and clearly undervalued. Houses aren't widgets. You can't distribute houses. You can't import and export them. 

35 minutes ago, Z said:

Once he saw how powerful it was becoming in Cincinnati..and once 3cdc saw the limits of what they could do without at least token support from the local elite. 

 

As has already been mentioned, 3CDC was formed by the business community. Bob Castellini has been on the board since the beginning. Carl Lindner was instrumental in its founding and was on the first board. 

 

How are we supposed to take you seriously if your ramblings can be so easily debunked? Maybe if you are repeatedly given evidence to the contrary you should rethink your views. 

43 minutes ago, Z said:

An increase from $1 to $2 is 50%. You still only have $2. Starting from a low price means that even modest increases in investment can lead to big percentage increases. I'll admit that that is a good bet for small investors who can't compete with institutional investors in other metros where prices are too high. 

 

Damn guy, you're pretty smart knowing how % work and all.

10 minutes ago, Clefan98 said:

 

Damn guy, you're pretty smart knowing how % work and all.

Personal insults are all you've got? My kingdom for a serious discussion! 

Edited April 21, 20205 yr by Z

Just now, Z said:

Personal insults are all you've got? My kingdom for a serious discussion! 

 

I wasn't insulting you, you're level of math is elite stuff.

40 minutes ago, DEPACincy said:

 

As has already been mentioned, 3CDC was formed by the business community. Bob Castellini has been on the board since the beginning. Carl Lindner was instrumental in its founding and was on the first board. 

 

How are we supposed to take you seriously if your ramblings can be so easily debunked? Maybe if you are repeatedly given evidence to the contrary you should rethink your views. 

There is no "business community." Castellini and Linder are on the board because the board understood the control of the local elites. Lindner was not instrumental in its founding. 3cdc chose to included them because they were told about how Cincinanti works. They didn't initiate it, though I'm sure that everyone involved benefited from giving that impression, especially as 3cdc's success became clearer for all to see. They were brought in to play the role of 'celebrity endorsers' for an organization created by others.  

Edited April 21, 20205 yr by Z

17 minutes ago, Clefan98 said:

 

I wasn't insulting you, you're level of math is elite stuff.

You're right. You were technically mocking me, not insulting me. Either way, I take it as a sign that you can't manage to refute my comments or the links I've posted.

Edited April 21, 20205 yr by Z

How does any of this relate to the housing market?