Cleveland real estate is one of the best options for those who want to start investing in properties. Named as the best city in the USA to purchase a home by Money Crashers, this city has a relatively lower housing price compared to state and national average.
Research shows that there are many single-family homes available for purchase or rent in Cleveland. As a result, this city becomes very attractive for young professionals who want to live in a place with a low living cost.
Cleveland Real Estate Market Trends
Redfin’s data shows that the average home prices in Cleveland slightly increased by 2.2% in June 2022 compared to 2021. The median price is $128,000 and there were 450 homes sold in June, a very slight improvement compared to last year.
On average, homes in Cleveland only go pending for 16 days before it finds its new owner. Some hot listings only spend around 4 days in the market and can be sold up to 7% above its listing price.
Cleveland Population Growth
There is an interesting fact about Cleveland’s population growth. Contrary to its increasing real estate market, the population of this city actually has gradually decreased by 6% for the past ten years. Nevertheless, studies showed that the population decrease doesn’t really affect the real estate market in Cleveland. The demand for housing, especially single-family homes, is still high. Some hot-listing houses can even be sold right after it is posted on the lists.
Now Cleveland has around 373,000 citizens, with Cleveland metro population of around 2 million. The decline of population is around 0.42% year over year. However, the average household income actually grows 1.82% compared to 2021.
Cleveland Quality of Life
Even though the population slightly goes down throughout the years, Cleveland real estate market is still going strong due to the education quality of the individuals. The economy does not only rely on the manufacturing industry, but also has expanded to the other sectors, notably banking, and tourism. Biotechnology also becomes a growing employment center in Cleveland to the point that many researchers are moving to Cleveland to pursue a career in this sector.
Cleveland is regarded as the best place to open business and have a career in the USA by Forbes. Despite the shift towards other industries, manufacturing is still popular, providing almost 2,000 job opportunities for the citizens of Cleveland.
Probably it has something to do with the decreasing number of populations, but reports show that the unemployment rate in this city has gone down by 5.5%. Furthermore, due to the increasing number of new businesses, household incomes also see a notable increase. Because of the prospering businesses, it is reported that Cleveland’s GDP goes up to $114,3 billion, a phenomenal 6% increase over the past decade.
One of the factors that play an important role in improving the quality of life in Cleveland is education and health care. Cleveland is the home of a renowned educational institution, University Circle. Furthermore, Cleveland also has Cleveland Clinic and University Hospitals, healthcare centers known for their excellent services.
Cleveland Historic Price Changes
In June 2022, the median housing price in Cleveland Ohio was $128,000. This is a significant increase compared to the median price in October 2021. It was $117,000 with a median price per foot of $78.
Freddie Mac House Price Index conducted a study concerning the House Price Index in Cleveland in the last 5 years, from 2017-2022. The research reveals that Cleveland’s HPI in 2017 was 107.4, and it increased to 163.1 in April 2022. There is a 51.8% increase in home sales between 2017 and 2022 while the one-year price change is 11.9%.
According to Kiplinger, Cleveland’s real estate market hit the lowest point in March 2012. After that, the sale number kept increasing without any significant decrease. The percentage of house sales increased to 78.4 in the span of ten years. Moreover, with an affordability index of 1 out of 10, Cleveland is one of the cheapest cities to purchase a property in the United States.
There are 40 neighbourhoods in Cleveland, and house price varies in these places. The most expensive neighbourhood in this city is Tremont. It has a median price of $440,000. Meanwhile, those looking for more affordable housing can go to South Collinwood. The median listing price is only around $59,000. This variety gives plenty of options for people who want to live in Cleveland.
Cleveland Cost of Living
The average cost of living in Cleveland is 4% lower than the national average, but also 4% higher than the state average. The cost of healthcare is significantly higher than the state and national average with 11% and 8% respectively. The monthly cost of food is also relatively higher than the state and national average by 3%. But for the other essential needs, Cleveland has a relatively lower cost compared to the national average. The living cost is also partially influenced by the recession and pandemic.
Even though some costs in Cleveland are pretty high, this city is still the investor’s favorite. This is because the housing price in this city is around 16% lower than the national average.
Cleveland’s Rental Market
More than half of the houses and buildings in Cleveland are occupied by renters. Consequently, those who want to invest in properties and receive good returns can consider purchasing a house or building to be rented. However, since the average home price in Cleveland Ohio is lower than the national average, many people might see this as an opportunity as well. As a result, the competition to get a good building might be high.
As regards the median rent, Zumper’s data shows that a 3-bedroom house costs averagely $1,100 per month. This number has seen a 10% increase compared to June 2021, and an even bigger increase of 20% in the past three years.
Those who want to invest in affordable rental properties can check the buildings around North Broadway and South Collinwood where rents are only around $800 per month. Meanwhile, if you want to aim for the more expensive areas, you can take a look at Hough, Downtown Cleveland or Tremont. The average rents in these neighbourhoods are more than $2,200 per month.
Cleveland Real Estate Market Forecast
Even though the number of Cleveland residents keep decreasing slightly over the years, this is not something that investors should worry about. The low living cost of Cleveland is still a huge attraction for young professionals, especially since some new industries are to be opened in the near future.
What home buyers and realtors should worry about is the low inventory. Despite the high demand, there are not enough houses being sold in the market. Constructions of new buildings are underway, but it might not be ready for the market until mid-2023.
Pros and Cons of Investing in Cleveland Real Estate
Cleveland is seen as a profitable market, but there are some drawbacks that make investors hesitant to invest in this city. Before you make a decision, make sure to consider these pros and cons.
- Low Cost of Living
It is not a secret that Cleveland Ohio cost of living is lower than the national average, even though it is actually still higher than the state average. But this is not a big issue since Cleveland is one of the biggest metro cities in the US.
This is a very attractive side of Cleveland, especially for those who want to experience living in a big city with a low living cost. Furthermore, finding a house in this area will not be a big problem since the housing cost here is below the national average by 23.1%
- Good Education
One of the factors that make Cleveland real estate very popular is the fact that the city has many excellent schools and universities. Cleveland education is ranked high nationwide compared to the other cities, and it also has many high school and university graduates.
- Good Transportation System
Cleveland has a reliable transportation system called The Rapid. It is an affordable public train that can take the citizens anywhere around the city. The Rapid is reported to be one of the best train systems in the country.
- Competitive Job Market
Even though many Cleveland citizens are university graduates, the job market is still very limited compared to the other major cities in the USA. Even though the U.S Bureau of Labor Statistics reported that the unemployment rate in Cleveland has gone down considerably by 5.5% in April 2022, there are still many millennial workers who prefer to move to another city to find a job more easily.
- Bad Weather
Cleveland is notorious for its snow. If you don’t like snow and prefer to stay somewhere with more sunshine, Cleveland is definitely not the best place for you. Cleveland receives at least 62.5 inches of snow every year.
- Crime Rate
Crime rate in some neighbourhoods is definitely a huge problem in Cleveland. The latest report shows that its crime rate is above the state and nation average. Even though there has been much improvement regarding the safety in this area, it still becomes a huge concern for many homeowners and investors.
Cleveland Real Estate Market FAQs
- When is the Best Time to Buy a House in Cleveland?
Every day is a great day to make a property investment. However, there are some days when the market is slowing down and it might be easier to purchase hot list housings.
According to HomeLight, January is the best time to seal a deal since property selling in this month is 27% lower than usual. February is also a good time with 14% lower selling than usual. Houses take around 40 days to sell around these months, indicating a less busy market.
- Which One Is the Best Neighbourhood for Cleveland Real Estate Investment?
Cleveland is a big city and there are many neighbourhoods with their own characteristics. The best neighbourhoods for you will depend on what you are looking for in a housing.
Ohio City and Detroit Shoreway are some of the best residential areas in this city. These areas have many new houses, renovated houses, redevelopments, and new entertainment centers. Housing prices in these neighbourhoods range from $200,000 to $300,000.
If you are looking for more affordable houses and you don’t mind older and probably unrenovated houses, West Park and Old Brooklyn can be a great choice. These areas have great reputations and lower crime rates. Most importantly, most homes are sold under $150,000.
- What to Check When Buying Property in Cleveland?
When you want to purchase Cleveland Ohio real estate, make sure to check every detail at the building. This is important particularly when you want to purchase older homes. Remember that there are many old homes in this city built around 60 to 100 years ago. It is common to find many problems in unrenovated houses.
The first thing you need to do is to go to the basement and check the integrity of the water system. In addition, the HVAC system is also an important consideration. Old HVAC systems can be a reason to ask for a lower price.
- Which Building Has the Most Resale Value?
Research shows that historic houses are actually the ones that have the most resale value. Some buyers turn it into boutique hotels which tourists really love. The price will soar if it has been renovated and equipped with modern touches. Historic houses might be beautiful and profitable, but it also comes with high initial cost. Most old houses definitely come with HVAC and water systems that are just as old and might need replacement.
Cleveland is a rising star in the real estate market. Some realtors worry about the steady decline of population throughout the years, but experts predicted that the number of populations will grow when there is more business and housing available in the city. Besides, looking at the increasing demand for rental housing in the area, it is safe to say that investing in Cleveland real estate will be profitable.