To cope with demand, once a city runs out of space to grow, it starts expanding in nearby areas. New developments emerge, overlooked neighborhoods get repositioned, and suburban communities get revamped. All these changes pose both opportunities and challenges for the real estate industry, which has to adapt to the new market conditions.
Starting from the hypothesis that each state has a different real estate scene, we’ve launched the Expert Insights series. Comprising a set of Q&A interviews with industry professionals from all over the country, our series aims to help you better understand the dynamics of each market.
Cincinnati, a Flourishing Real Estate Market
Cincinnati, Ohio, a city of roughly 300,000 citizens within a large metropolitan area, is experiencing a real estate boom. Real estate investment firm HomeUnion has named The Queen City of the West the second-best market for single-family rental home investors in the U.S. The economy of the fastest-growing major city in the Midwest benefits from a healthy business scene, aided by the Fortune 500 companies headquartered here. As a side effect, these companies also drive up housing demand.
For this episode of our Expert Insights series, we’ve reached out to Derek Tye, president of The Tye Group, to tell us more about the Cincinnati real estate scene. Former president of the Southern Ohio Association of Realtors and the Montgomery Ohio Chamber of Commerce, Tye has a proven record of success. In 2017, for instance, he closed $30 million in transactions. Today, he reveals a few insights regarding new developments in the area and the impact company relocations have on the local real estate market.
Q: How did you end up working in this field and what drew you to it?
A: I have been working in the real estate business for over 14 years. I got into it after watching commercial real estate transactions from the commercial banking side at U.S. Bank. I realized that the guys on the other side of the table, who were working directly with the buyers and the sellers, seem to be having more fun and making more money. That’s what originally drew me to this. My wife and I have bought and sold about 12 homes personally, so we really love the real estate industry.
Q: What does it take to be a successful broker in this highly competitive market?
A: We have to put people first. We need to be constantly looking for the best opportunities for our buyers and to be proactively looking for buyers for our sellers. This means setting up demographic and geographic profiles of the buyers most likely to be interested in our sellers’ properties. We also specialize in keeping drama and stress out of the transaction as much as humanly possible. We have a motto here at The Tye Group: “More Joy, Less Drama.”
Q: Describe your most challenging project so far. How did you deal with it?
A: We recently had a commercial property located in the Loveland area that took three years to sell. It was in a floodplain, but on a very busy corridor. After working through the logistics of moving dirt, working with the county planners, the engineers’ office, and other municipalities, we finally found a developer that would purchase the property and develop it properly for a new business use. We are excited to see this property go from a vacant corner to a new business here this year.
Q: Are there any investment/development clusters/submarkets in Cincinnati right now? Where is development focused and why?
A: We are bullish on Loveland, Ohio, an eastern suburb of Cincinnati, due to the national scenic river and the paved state-long bike trail that runs through the town. It is a historic city that had a passenger train line running through for many years. The old town and the new development are mixed there, and the area has bars, restaurants, a bike shop, a running store, retail spaces, apartments, homes, condos, and farms nearby. It has a really neat small-town feel. You can dine street-side or trail-side and people-watch from morning till evening.
There have been a few multi-million-dollar developments recently completed, along with plans for several new upscale retail and condo properties. The school district is rated excellent, and it is close to highways and jobs. My wife and I have our own real estate investment company and have made a couple of investments there ourselves in the past year, with plans on more in the future.
Q: In your opinion, what are some of the strengths of the Cincinnati real estate market, and what are the challenges? How do you deal with them?
A: Cincinnati has a very diverse population of about two million people and nine Fortune 500 company headquarters here, sprinkled all over the region. We have a “tri-state” area with Northern Kentucky, South-Eastern Indiana, and South-Western Ohio, all coming together. We have a healthy small- and medium-sized business climate and our startup scene is very strong. We work with a lot of companies relocating employees here. Those employees find our house prices reasonable and the homes to be generous in size and amenities.
In the Cincinnati home market, right now we are at a ten-year low in inventory, so we have to get creative finding housing for these executives. Sometimes this involves door-knocking in target neighborhoods, calling homeowners, using Nextdoor, networking with other agents, etc. Ultimately, we find our clients’ dream home and help them with concierge services, to ensure a smooth transition to Cincinnati.