Cleveland Investment Properties & Real Estate Outlook

Last updated on December 19, 2020

Home to more than two million residents¹, the Cleveland metro area is the 36^th 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.

What's attractive about Cleveland:

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.

Factors to watch:

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.

Did You Know:

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.

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