Dayton economy. Where is it going?

[Gary Mendrin]

Hello to Dayton, Ohio investors! I'm interested in the Dayton market and trying to understand what's been happening there since the Great Recession. I've read some of the Dayton CAFR and it says the Dayton Region experienced recent employment growth since 2013, until a reversal in the fourth quarter of 2018 through the first quarter of 2019. But the CAFR also suggested that while the regional job numbers had suffered, the city wasn't so affected. It also says there is a lot of business growth happening or expected soon.

It seems like Dayton was hurt by the recession - but the local government and businesses are working hard to turn things around. I'd like to know if Dayton investors are optimistic and seeing things actually turning around. What caused job losses late 2018? How has the real estate market been affected?

[Christopher Sineno]

@Gordon Starr

Apologize for the delay in my response... My biggest argument for answering your questions comes from a conversation I had recently with a realtor in the Greater Dayton Area. 

To truly understand the change in population, outside of industry shifts in manufacturing demands, I believe the answer lies in changes in actual physical city limits of Columbus vs Dayton. Before I dive in, I do believe that Columbus, Ohio is a wonderful place to invest in RE, but so is Akron, certain divisions of Cleveland, the northern most sections of Cincinnati - It all demands on the tastes and organizational structure of the invester. How diverse the individual wants his/her portfolio to be. Each area has its own Pros & Cons...

But when it comes to Columbus vs Dayton in regard to population flunctuations since 1960:

As of today... Columbus city limits are approx. 223.11 sq mi (217.17 sq mi of land), currently - with the Metropolital Area spanning a whomping 4,000 sq miles. From 1950-2000, Columbus annexed a lot of land from the surrounding areas - now situated firmly in 11 counties, growing almost sevenfold. Larger corporate head quarters and major industry giants hang their hat here. Definitely a respectible position for a Capital City. Dayton is 56.5 sq mi - from defined city limits. What is labeled "Greater Dayton" is 1,715 sq miles - which is less that half compared to Columbus.

During the same period, Dayton took a major economic hit, and the city limits themselves did not see the growth that the Capital did. A large part of this was the employment decline due to the demise of manufacturing giants like NCR, General Motors, and the Mead Paper Company. Over 30,000 jobs, gone, poof. So the city shrunk. In 1960, Dayton hand 160,000 people within city limits. In 2000, Dayton was ranked 147th in its size, from the nationwide census. We are now in the top 60. Less than 20 percent of the population of Mongtomery county live INSIDE Dayton City Limits... taking to the developing suburbs.

What Dayton is doing now is smart... They are building off their past in manufacturing, moving toward industrial tech. They utilized their geographical position (with the intersection of Interestate 70 & 75) to position themselves as a waypoint for logistics and travel, and even started the I-675 auxiliary in late 1987. But with Reynold & Reynolds, Lexus/Nexus, Fuyap Glass America, CareSource, PSA Airlines, and GE Aviation all establishing their HQ here, Dayton is setting itself up for the future. And I am just naming a few companies that are major players in the US National economic market. This doesn't touch the new Amazon warehouse that just opened here as well.

To Recap - Columbus grew in land-mass. Which stimulated growth in all areas. 

Dayton stayed the same in land-area (or barely grew) - but has been in a developmental repositioning in recent years. Thus why it continued to be a great place for real estate investing. There was even a recent article posted in Forbes calling Dayton the "Hidden Gem" of REI, specifically turnkey investing.