If you are looking at buying a house in Cleveland you must read till the end. Cleveland is often looked at as a has-been market. However, its turnaround has created several opportunities for investors and residents alike. The Cleveland housing market is rebounding. All indicators point to growing income, a solid job market, and increasing home values in Ohio. The Cleveland real estate market prediction is positive — investors and home buyers will reap benefits when considering the city and its suburbs over the next few years.
According to Realtor.com’s latest report, Cleveland is one of the top U.S. markets for new listings. Cleveland saw an increase of 35.8 percent in the number of homes listed for sale. That ranked third among the country’s 50 largest metro areas, with Columbus, Ohio leading the way with 42.9 percent, followed by Baltimore with 36.9 percent.
In August 2021, the median list price of homes in Cleveland, OH was $113K, trending up 3.7% year-over-year. The median listing price per square foot was $68. The median sale price was $123.5K. Homes in Cleveland, OH sold for approximately the asking price on average in August 2021. On average, homes in Cleveland, OH sell after 56 days on the market.
Cleveland Housing Prices, Trends, and Forecasts
The FMHPI provides a measure of typical price inflation for houses within the United States for the state, national, and Metropolitan Statistical Areas. The current Freddie Mac House Price Index for Cleveland–Elyria Metropolitan Statistical Area (MSA) is 152.21 (June 2021).
June 2011 HPI: 88.4
10-year change in home prices: 72.2%
June 2020 HPI: 130
Annual House Price Appreciation: 17.1%
May 2021 HPI: 150.1
Monthly change in home prices: 1.4%
Source: Freddie Mac House Price Index (FMHPI℠)
Here’s the July 2021 Market Report for Cuyahoga County released by the Akron Cleveland Association of REALTORS®. Cleveland is a seller’s real estate market. Months Supply of Inventory is 1.3 months. It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Six months of supply has historically been associated with moderate price appreciation, while a lower level of months’ supply tends to accelerate price increases.
Total homes sold in Cuyahoga County were 1,762, down 0.5% from 1,770 in July 2020.
In July 2021, the median sales price in Cuyahoga County was $188,000.
The average sales price was $240,884.
The average sales price per sq. ft. was $129.
The average list price was $240,884, down 1.7% from $300,184 in July 2020.
Pending sales in July were 2,517.
Homes are typically seeing offers accepted faster than a year ago.
The median days on market is 29 days.
New listings were up 11.8% compared to July 2020.
Active listings were down 8.7% compared to July 2020.
Months Supply of Inventory is 1.3 months.
Data by Redfin, a real estate company, shows that the Cleveland housing market is somewhat competitive. Homes in Cleveland receive 5 offers on average and sell in around 20 days. In August 2021, Cleveland’s home prices were up 19.8% compared to last year, selling for a median price of $125K. On average, homes in Cleveland sell after 25 days on the market compared to 34 days last year. Hot homes can sell for about 7% above the list price and go pending in around 7 days. There were 405 homes sold in August this year, up from 400 last year.
Cleveland Rental Market Trends
Cleveland has a mixture of owner-occupied and renter-occupied housing. The average rent for a 1-bedroom apartment in Cleveland, OH is currently $1,343. This is a 12% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Cleveland increased by 2% to $925. The average rent for a 1-bedroom apartment increased by 3% to $1,343, and the average rent for a 2-bedroom apartment increased by 13% to $1,475.
The average rent for a 2-bedroom apartment in Cleveland, OH is currently $1,475. Compared to last year, the average rent price has remained flat.
The average rent for a 3-bedroom apartment in Cleveland, OH is currently $1,000. This is a 5% decrease compared to the previous year.
The average rent for a 4-bedroom apartment in Cleveland, OH is currently $1,073. This is a 13% increase compared to the previous year.
The most expensive neighborhoods in Cleveland are Glenville, Downtown Cleveland, Hough, Ohio City, and University.
Cleveland Real Estate Market Forecast 2021-2022
What are the Cleveland real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. Cleveland has a record of being one of the best long-term real estate investments in the U.S. The Cleveland metropolitan area, or Greater Cleveland as it is more commonly known, is the metropolitan area surrounding the city of Cleveland in Northeast Ohio, United States. The five-county Cleveland–Elyria Metropolitan Statistical Area (MSA) consists of Cuyahoga County, Geauga County, Lake County, Lorain County, and Medina County, and has a population of over 2 million.
Since Sep 2011, the Cleveland–Elyria Metro home values have appreciated by nearly 60.4% — Zillow Home Value Index. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Greater Cleveland is currently $197,278. It indicates that 50 percent of all housing stock in the area is worth more than $197,278 and 50 percent is worth less (adjusting for seasonal fluctuations). The typical value of homes in Cleveland (City) is $96,455, up 28.6% over the past year.
In Sep 2020, the typical value of homes in Greater Cleveland was around $169,000. Home values have gone up 18.1% over the past year alone. Cleveland is a hot seller’s real estate market as there exists a limited supply of homes, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations.
There are fewer homes for sale than there are active buyers in the marketplace. Also, in a balanced real estate market, it would take about six months for the supply to dwindle to zero. In terms of housing supply, the Cleveland market can tip to favor buyers if the supply increases to more than six months of inventory. And that’s not going to happen soon.
The Cleveland real estate market remains strong to favor sellers, due to persistent imbalance in supply and demand. The real estate appreciation rate in Cleveland in the latest quarter was around 2.27%, which equates to an annual appreciation rate of 9.41%. Relative to Ohio, NeighborhoodScout’s data shows that Tampa’s latest annual appreciation rate is higher than 80% of the other cities and towns in Ohio. However, even small changes in the appreciation rate can change the long-term value of buying considerably.
Here is the housing forecast for Cleveland, Cuyahoga County, and Cleveland MSA. The home appreciation has been incredibly strong over the past year.
Cleveland–Elyria Metro home values have gone up 18.1% over the past year and Zillow predicts they will rise 12.1% over the next 12-months.
Cleveland home values have gone up 28.6% over the past year (current = $96,455) and will continue to rise over the next twelve months.
Cuyahoga County home values have gone up 20.7% over the past year (current = $180,455) and will continue to rise over the next twelve months.
Lorain County home values have gone up 15.6% over the past year (current = $192,169) and will continue to rise over the next twelve months.
Medina County home values have gone up 14.5% over the past year (current = $267,924) and will continue to rise over the next twelve months.
Credits: Zillow
Cleveland Real Estate Investment Overview
Should you buy investment property in Cleveland? Looking for a home in Cleveland? These up-to-date Cleveland real estate statistics and trends will help you make smart investing decisions. You need to drill deeper into local trends if you want to know what the Cleveland market holds for the year ahead. We have already discussed the Cleveland housing market trends & forecasts for answers on why to put resources into this sizzling market. Cleveland is home to just under 400,000 people. The larger metropolitan area is home to roughly two million people.
That makes the Cleveland real estate market the 32nd largest in the country. If you include the Cleveland-Akron-Canton metro area, there are three and a half million people in the “combined statistical area”, making it the 15th largest metropolitan area in the United States. This century-old city was once a major manufacturing center. It is reinventing itself as a medical and BioMed hub. Home prices in Cleveland have been trending up 8.6% year-over-year.
As per the data from the real estate company called Neigborhoodscout.com, single-family detached homes are the single most common housing type in Cleveland, accounting for 46.56% of the city’s housing units. Other types of housing that are prevalent in Cleveland include duplexes, homes converted to apartments or other small apartment buildings ( 26.01%), large apartment complexes or high-rise apartments ( 20.51%), and a few row houses and other attached homes ( 6.23%).
Just four miles from Downtown Cleveland, the University Circle has long been a diverse and appealing mix of single-family homes and apartments. This area of the city has the flavor of a quaint college campus. Given that area amenities are within walking distance, there is a lot of foot and bike traffic, which lends to its charm. The area is one of the largest employment centers in the entire state. People in Cleveland primarily live in small (one, two, or no bedroom) single-family detached homes.
Here are the top reasons to invest in Cleveland real estate.
Top 10 Job Market for New College Graduates (CNN)
Presence by 70% of Fortune 500 comp.
More than 400 bioscience companies.
Two new Amazon distribution centers.
Over 120,000 healthcare professionals.
Home to 27 area colleges & universities.
Home to four professional sports teams.
Positive Demographic Trends
Cleveland’s population is stable at around 400,000 residents. It is doing a decent job of retaining its young people. Why is that something to bring up when discussing the Cleveland housing market? Because it is right next to Detroit, a city that has been shedding people for decades. The Cleveland real estate market is thus bolstered by steady to slow growth, though specific neighborhoods are seeing spikes in their valuations as new employers and attractions move in.
The Bright Future of Good Paying Research Jobs
Cleveland has invested in healthcare and bio-science business accelerators like Bio-Enterprise and the Global Center for Health Innovation. They expect institutions like this to lead to new healthcare advancements provided first in Cleveland and in the hope that discovered drugs and technology will be manufactured in Cleveland. Investors can find affordable investment properties for development and either sale or rental to people working at these facilities. In fact, Cleveland’s Health-Tech Corridor is a prime place for high-tech companies, while the Cleveland real estate market is booming around these businesses.
Downtown Brownfield Re-Development
Cleveland is intentionally redeveloping a number of brownfield industrial sites to create multi-use properties. For example, the Terminal Tower is being turned into a combination shopping and entertainment district. The Cleveland Gateway project is going to turn 65 acres into a densely populated urban neighborhood, mixing multi-family housing with trails, a marina, and an urban park. If you can’t invest directly in this redevelopment project, note that single-family and multifamily housing stock around the new units will go up in value as new infrastructure is built.
Significant redevelopment is occurring along the thoroughfare running from East 55th Street to East 105th Street. Given that it is right off Interstate 490 and connects with downtown streets like Quincy and Chester Avenue, this is an excellent place to buy a property that is going to go up in value. When you know that better streets and traffic management along with improved public transit will go into an area, it is a safe bet for investing in the Cleveland real estate market.
The nucleus is another downtown redevelopment project that seeks to bring mixed-use real estate to depressed areas. The nucleus is centered around two million square feet of retail, residential, and office space, though there will be around 500 residential units. If you want to invest in the Cleveland real estate market, consider buying and rehabbing housing for those who will work in NuCleus but couldn’t get one of the apartments or condos.
University Circle & The Western Rim
University Circle is one of the hottest neighborhoods in Cleveland. It is seeing a wave of high-end condos and apartments. If you can find single-family rentals or multi-family housing in the vicinity, snap it up. These are among the most desirable properties in the Cleveland housing market. We know that when they were willing to turn a former Children’s Museum into an apartment building.
The Western Rim of Cleveland hasn’t been overlooked in the rush to redevelop downtown and the Biotech corridor. Projects worth an estimated 350 million dollars have been proposed or are actually under construction between West 25th and West 117th streets. A business incubator has been proposed for the Western Rim. The Cleveland housing market on the west side should see significant growth as new businesses pop up here. The luxury rentals built in the Near West Side are probably only the start of this area’s resurgence.
The Redeveloped Lakeshore
Cleveland sits on the southern shore of Lake Erie. Cleveland is redeveloping its long waterfront district. The fifty-year plan has already resulted in mixed-use development between West 3rd and East 18th streets. Redevelopment includes rehabilitating waterfront infrastructure like bridges, canals, and “made land”. Reinvented lakeside trails create desirable areas that will command a premium on the Cleveland real estate market. Euclid has already demonstrated this with their lakefront project and main waterfront park. Newly opened areas like the one created by the demolition of the FirstEnergy coal fire plant are to be seen as opportunities to reinvent the Cleveland real estate market.
A New Lease on Life for Old Buildings
The Cleveland housing market is so hot that they’re turning old commercial buildings into new residential spaces. A classic example of this is the former Huntington Bank Building; it is currently known as the 925 Building. The commercial building will be transformed into a mixed-use building with office space, retail space, a Hilton hotel, and 600 apartments.
Catering to the New Medical Talent
While there are Americans who worship Canada’s single-payer healthcare system, the reality is that millions of Canadians come to the United States each year. Some were denied care by their government, while many simply don’t want to wait months for a procedure, so they choose to pay cash at U.S. hospitals. Cleveland is building medical facilities to cater to these medical tourists. And these doctors, nurses and medical specialists are buying homes close to work, whether it is at the world-renowned Cleveland Clinic or the hospital down the street.
Another variation of this strategy is buying property in the Cleveland housing market that caters to medical school students. Case Western Reserve University and the Cleveland Clinic Lerner College of Medicine see many students from around the world who come to the area for one to five years to attend before leaving to practice elsewhere. (The Lerner College is a five-year tuition-free medical school).
Summary
If you are a home buyer or real estate investor, Cleveland real estate investment definitely has a track record of generating one of the best long-term returns in the U.S. through the last ten years. Cleveland is a notable exception to the decline of the Rust Belt cities. It has managed to reinvent itself, shifting from classic manufacturing to biotech and medicine. In the process, it has maintained its population and has strong potential for growth both economically and demographically.
There are over 590 schools in Cleveland, OH. There are 238 elementary schools, 154 middle schools, 84 high schools, and 121 private & charter schools. There are over 105 neighborhoods in Cleveland. Some of the best neighborhoods in or around Cleveland, Ohio are Old Brooklyn, Parma, and Euclid. The Bay Village area is a highly desirable suburb of Cleveland, Ohio.
Cleveland Magazine rated it the number one suburb to nest in, citing low crime, increasing home values, and great schools. Bay Village retained these positive elements even during the recession. Tremont has a median listing price of $320K, making it the most expensive neighborhood. Mount Pleasant is the most affordable neighborhood, with a median listing price of $60K.
Here are the 10 highest appreciation neighborhoods in Cleveland since 2000 (List by Neigborhoodscout.com).
W 25th St / Walton Ave
W 7th St / Marquardt Ave
Detroit Ave / W 25th St
Castle Ave / Scranton Rd
Route 422 / Broadway Ave
W 6th St / Literary Rd
Detroit Ave / U.S. Route 6
Euclid Ave / E 55th St
City Center
Lake Ave / Detroit Ave
Buying an investment property is different from buying an owner-occupied home. Our Cleveland investment properties are designed to make money as rentals, which means you must look at it solely as an income-producing entity just like any other business. These are “Turnkey Cash Flow Investment Properties” located in some of the best neighborhoods of Cleveland.
Another market that we suggest is the housing market in Iowa City. While the Iowa City real estate investment market is not overheated or exciting, it offers strong fundamentals like a large rental population relatively immune to rental rates. It will see slow, steady growth in property values and rental rates for years to come.
Investors in hot real estate markets have to wonder if the appreciation and rental increases will stop when a wave of new inventory hits the market. The Iowa City housing market does not face this problem. Instead, demand for the existing Iowa City housing market remains steady while the supply is constrained by a lack of construction. Replacing homes that flooded or burned down does not bring new inventory to a slowly growing market.
Another market that we suggest is the housing market in New Orleans, LA. New Orleans is a bit pricey for an average investor to make good returns and it involves strategic planning. However, it offers a good combination of short-term renters like students and tourists and a permanent population of renters who cannot afford to buy homes. Geography and market forces limit housing supply, keeping home values and rents stable.
Airbnb was legalized in the New Orleans real estate market in 2016 and it’s been growing quite well since then. Therefore, you can choose to invest in Airbnb rentals in New Orleans and earn a steady rental income. The upfront cost of running an Airbnb business is not much as you do not need to own a rental property. However, if you want, you can buy a rental property in New Orleans for an Airbnb investment. Unlike big cities like New York, the regulations on short-term rentals in New Orleans are not very tight, though there is some criticism from opponents about the leniency of these laws.
Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments. Buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities. We can help you succeed by minimizing risk and maximizing profitability. We recommend asking for a FREE Strategy Session by clicking here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
Market Data, Trends & Statistics
https://www.zillow.com/cleveland-oh/home-values/#
https://www.redfin.com/city/4145/OH/Cleveland/housing-market
https://www.neighborhoodscout.com/oh/cleveland/real-estate
http://www.freddiemac.com/research/indices/house-price-index.page
https://www.realtor.com/realestateandhomes-search/Cleveland_OH/overview
https://www.movoto.com/guide/cleveland-oh/cleveland-real-estate-market-trends
Lerner College
https://atlantisglobal.org/blog/2017/11/21/get-paid-in-medical-school-my-journey-to-the-cleveland-clinic-lerner-college-of-medicine
Brownfields / urban redevelopment
https://www.calthorpe.com/content/cleveland-gateway-redevelopment-plan
The Opportunity Corridor
http://www.freshwatercleveland.com/features/SevenProjects022317.aspx
University Circle
http://www.freshwatercleveland.com/features/SevenProjects022317.aspx
Waterfront
http://planning.city.cleveland.oh.us/lakefront/cpc.html
https://www.cleveland.com/architecture/index.ssf/2017/11/euclid_close_to_building_lakef.html
http://www.news-herald.com/lifestyle/20170602/clevelands-lakefront-parks-are-stable-flourishing
The Western Rim
http://www.crainscleveland.com/article/20170507/news/170509850/clevelands-western-rim-embarks-development-boom
Biomedical hubs and hospitals
http://www.theglobalcenter.com/about-us
Luye Medical Collaborates with Cleveland Clinic to Pioneer Value-Based Healthcare in China
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