Unaffordable housing is one of the major challenges facing Americans presently. The cost of homes has reached new highs, and the average price range between $300,000 and $400,000, depending on the statistics provider. But this price doesn’t apply everywhere. There are still several places where homes are quite cheap. Ohio is one of those places. So, why are houses so cheap in Ohio?
The average price of homes in Ohio is below $200,000. This is due to factors such as low population growth that doesn’t exceed the housing supply, low wages, land, and the history of the real estate market. Some of the best places to buy houses in the state include Obetz, Wellington. Toronto, etc.
While the price of homes in Ohio is cheap, it’s still important to consider whether the state is a good place to buy real estate. Here, we discuss why homes in Ohio are cheap and whether it’s a good place to buy a property.
Cost of House in Ohio
According to Zillow, the typical home value in Ohio is $199,403. This is below the national average of around and makes Ohio one of the country’s cheapest states to buy homes. The average cost of homes in Ohio is quite cheap, even in its major cities. The average price of a home in Cincinnati is $221,280, Columbus is $228,115, Cleveland is $101,227, and other cities are within that range too. The home’s value here is low despite the 16% increase in price in the past 12 months.
Factors Responsible for The Cost of Homes in Ohio
The low cost of homes in Ohio is simply due to demand and supply. The demand for homes in Ohio isn’t as high as the supply of houses. But this low demand doesn’t exist in a vacuum. It’s a result of various reasons such as:
1. Corresponding Population and Housing Growth
The state’s population hasn’t grown much in the last few years. This makes it much easier for many people to find homes here. The state has a population of 11.8 million with over 5 million housing units. This means there are more homes than people willing to live in them. As of 2020, the housing unit vacancy in the state was 8.3%. The population growth and increase in housing units have mostly been on par between 2010 and 2020. While the population rose by 2.3%, housing units rose by 2.2%. Since there is no housing shortage, the price hasn’t increased.
The low population growth is due to several factors, such as migration and the general perception of several people about Ohio. Most people don’t consider Ohio a desirable place, so it doesn’t get as many people moving in from densely populated states. Not only has the population of Ohio increased only slightly, but that of some of its major cities has even shrunk. For example, Cleveland’s population growth rate hadn’t grown like other cities since the 70s. So, the vacancy rate is high, and the price is low.
Another reason for the low cost of homes in Ohio is its geography. The state doesn’t have any natural barriers such as water bodies and mountains restricting construction. So, there’s the availability of land for any construction. The land is cheaper here than in several other states, and by extension, construction costs are also lower. Even in the major cities here, there are still many undeveloped lands. So, there’s no fear of high population density.
3. Low Pay
Income in Ohio isn’t that high, affecting the cost of homes in the state. With an average income of around $30,000 annually, it’s not exactly the place everyone wants to be. The low average income means that the purchasing power isn’t so high, and sellers have to list their homes based on the market conditions. As a result, even the homes considered cheap by many people from states such as California and New York could still be seen as expensive by those who live in Ohio. In this sense, cheap is quite relative.
4. Real Estate Market History
The real estate market in Ohio hasn’t always been low. The housing crisis affected the market significantly, leading to the prices of homes crashing. Since then, the market is yet to rebound fully. Unlike states where there’s a fear that home prices will increase in the future, residents of Ohio don’t have that fear. The chances of a significant increase in home prices are quite low, which means not many people are ready to buy the homes on the market.
Is It Advisable to Buy a House in Ohio?
If you’re planning to live in Ohio, it’s always advisable to buy as long as you’ll be spending multiple years. Even though the cost of homes has climbed significantly in the past few years, this is still one of the cheapest places to own a property in the US. Although it’s possible to find affordable homes in other locations, finding one in a great neighborhood with sufficient facilities isn’t that easy. But Ohio can offer that. The fact that the cost of rent could be higher than a mortgage or around the same rate for similar properties also makes it more advisable to buy homes. Due to the low cost of homes, the down payment on property here is more affordable than in many states.
Best Places to Buy a House in Ohio
If you’re planning to buy a house in Ohio, some of the best cities to consider include:
- Munroe Falls
- St. Clairsville
- Canal Fulton
All these areas are suburbs where the average price is generally below $200,000, while the city still offers all basic amenities needed in a residential area.
Homes in Ohio are quite cheap due to factors linked to lower demand. Although this might make it a desirable place, it’s important to ensure Ohio is the right place. In addition, the state is currently experiencing a selling market like the rest of the country. So, the property price might be much higher than the actual value.