Note: Our market forecast includes Cleveland data and data from its surroundings, including Elyria.
Cleveland is the second-largest city of Ohio, with a population of nearly 400,000 and a metro area that contains more than 2 million residents. The largest city on Lake Erie, Cleveland is part of Cuyahoga County, the Buckeye State's second-largest county and home to over 1.2 million people. All told, the Greater Cleveland region is ranked as the 33rd largest metropolitan area in the country.
The city's location near the mouth of the Cuyahoga River and close proximity to canals and railroads made it a major manufacturing hub in its early days. Today, the city reflects a more diverse economy, including healthcare, higher education, technology, and financial services.
In addition to industry, Cleveland is also a hub for arts and culture. Playhouse Square is the country's second-largest performing arts center, and the Cleveland Museum of Art is one of the most popular museums in the world. It's also known for being a big sports town, with the Cavaliers, the Browns, and the Indians being the major pro sports teams. Cleveland's nickname is "The Forest City," as it's an integral part of the Cleveland Metroparks nature reserve system.
If you're thinking about investing in Cleveland, here's what you need to know.
The state of the market
The cost of living in Cleveland is lower than elsewhere in Ohio and the rest of the nation. As with many cities across the country, Cleveland was heavily affected by the pandemic. Here are some other trends worth noting in Cleveland:
- Unemployment rates were high during the pandemic: Back in April 2020, unemployment rates skyrocketed to 21.8%, meaning that about 1 in 5 Clevelanders were out of work. While joblessness has improved greatly over the course of the past year while mortgage interest rates were at their lowest, the loss of income might have forced would-be homebuyers to stay renters for a bit longer.
- The median price of a home is much lower than the national average: Although lower property prices make it easier for investors to break into the market, the resale value will not be nearly as high as in other markets. Fix-and-flip investors will especially want to keep an eye on their bottom lines so that they don't outprice comps with expensive renos.
- It's more expensive to rent than buy: According to the Urban Institute, there's a rent gap that favors buying a home in Cleveland. For renters, 18.21% of income is earmarked for rent, while only 14.48% is put toward the mortgage, representing a gap of 3.73%.
Let's take a closer look at some of the key factors driving the current housing market in Cleveland.
Cleveland housing demand indicators
All data and charts supplied by Housing Tides by EnergyLogic.
Cleveland's median rents and home prices are both well below the national average, but the city is still struggling in its unemployment stats. This could put homeownership on hold for those affected, while higher-priced rental units might remain vacant.
Cleveland is currently at a 4.9% unemployment rate, a 1.3% decrease year over year. Right before the pandemic, Cleveland's jobless rate was at 6.2%, but that figure shot up to 21.8% in April 2020, a full 7% higher than the national average. Cleveland's jobless rate has greatly improved over the past year, though, and it now sits more than a full point below that of the national average.