The Columbus multifamily market has performed strongly over the past 12 months, with sales volume nearly doubling the previous three-year average. The market’s affordability and higher yield potential have been driving this trend. However, the sales volume is expected to perform moderately in the first half of 2023 due to the widening gap between buyer and seller expectations on property valuations caused by high-interest rates.
Columbus’s cap rate average in Q1-2023 was 5.4%, ranging from 4.1% to 12.7%. Northeast Columbus had the lowest cap rate, while the Greater Hilltop had the highest, based on Q4-2022 data. Most ownership by asset value is locally owned markets, accounting for 55%, but out-of-state private and institutional buyers are increasingly active.
Despite the expected moderation in sales volume, pricing has remained stable, with an average price per unit of around $180,000 on all class asset types. With the continued demand for multifamily properties in the Columbus market, there is a possibility of stable pricing and sustained sales volumes in the near future. However, the impact of interest rates and inflation on the market should be closely monitored, and investors should remain cautious as market conditions may change rapidly.
Source: Costar Group