Cleveland Investment Property Market

Cleveland Property Market Overview

Home to more than two million residents1, the Cleveland metro area is the 36th largest in the U.S. and the second largest city in the state of Ohio. The Cleveland real estate investment markethas experienced recovery since the recession, with home values increasing more than 19% since 2011. While home values still remain 5% below the prior peak, they are expected to increase an additional 8% by 2019.

Solid Gross Rental Yields, Affordable Homes, and Positive Home Price Appreciation Predictions

The Cleveland real estate investment market has positive home price appreciation forecasts and a healthy supply of affordable homes, with a median resale price that is 46% below the national median. Household and employment growth are steady, and in 2016 the local economy added 9,400 jobs. Median household income is $54,800 and has increased every year since 2012, a trend that is forecasted to continue through 2020.

Another factor that makes theCleveland real estate investment marketa goodoptionfor single-family rental investors is gross market yield (annualized rent divided by home price). With median sales prices in the $70,000-$86,000 range2 and gross rental yields predicted to stay above 12% through 2020, Cleveland offers affordable entry points and attractive returns.

In addition to its strong roots in the manufacturing industry3, Cleveland has one of the most diversified economies4 in the U.S., and we believe this makes it less susceptible to market volatility. The area has also been recognized as a startup incubator5.

When it comes to underlying fundamentals that drive single-family rental returns (job growth, household growth, income growth, and housing supply), Cleveland demonstrates progress on all fronts.
  • The expanded Route 8 infrastructure connecting Cleveland to Akron has fueled economic expansion.
  • Emergence of suburban markets: Cleveland is undergoing a general shift as businesses are lured from downtown to the suburbs.
  • Strong current and forecasted gross rental yields above 12% through 2020.
  • Positive forecasted home price appreciation through 2020.
  • At 92.1%, occupancy rates are slightly below the weighted average for the top 20 single-family rental markets in the U.S. (93.6%)
  • Currently at $54,800, median household income has increased every year since 2012 and is forecasted to continue increasing through 2020. However, it is still 8% below the national average.
  • Combined with nearby Akron and Canton, Cleveland is ranked as one of the largest television markets by Nielsen Media Research.
  • Cleveland is home to many professional sports teams including the Cleveland Indians (baseball), Cleveland Browns (football), Cleveland Cavaliers (basketball), as well as the Rock & Roll Hall of Fame.
  • Cleveland’s merry-go-round museum is famously haunted.

Real Estate Investment Insights

Investment Style: Balanced
While each property will differ, this market is likely to have properties that provide a blend of yield and appreciation.
Inventory:
Home Value *
$138,100
$210,200
National Avg
Home Value Growth (YoY)
5.2%
7.6%
National Avg
Rent **
$1,147
$1,445
National Avg
Source: Financial data from Zillow includes single family, condo & cooperative homes, updated on 02/28/2018
Job Growth (YoY)
0.3%
1.6%
National Avg
Household Growth (YoY)
0.3%
1.0%
National Avg
Estimated Months of Resale Supply
2.5%
3.4%
National Avg
Household Income
$54,900
$61,313
National Avg
Supply, Demand & Affordability data includes single family homes only, updated on 04/12/2018
  • Arrows indicate the directional change since the last update. No arrow indicates that there was no change in the data or no previous data is available.
  • * Home Value: includes all types of housing, including primary resident, condos, investment properties, etc.
  • ** Rent: includes all rental properties, including Single-Family Homes, multi family units, etc.