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Cleveland's Housing Market: Rising Home Values and Shifting Ownership in the Rock and Roll Capital
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Cleveland, Ohio, a city renowned for its industrial heritage and cultural attractions like the Rock and Roll Hall of Fame, has experienced significant changes in its housing market over the past decade. The city has seen a general trend of declining homeownership, rising average home prices, and increasing average rent prices, reflecting its evolving economic landscape.
The homeownership rate in Cleveland has shown a slight downward trend over the years. In 2013, 42% of housing units were owner-occupied. This rate fluctuated slightly, dropping to 40% in 2014, then rising back to 42% in 2016. However, by 2022, the homeownership rate had settled at 40%. Concurrently, average home prices in Cleveland have shown a significant upward trajectory. In 2013, the average home price was $45,267. This figure rose steadily, reaching $72,295 in 2019, and then experienced a sharp increase to $102,013 by 2022. This represents a remarkable 125% increase in average home prices over a nine-year period.
The relationship between federal interest rates and homeownership rates in Cleveland shows some correlation. In 2013, when the federal interest rate was at a low 0.11%, the homeownership rate was at 42%. As interest rates began to rise gradually from 2016 onwards, there was a slight decline in homeownership rates. For instance, in 2018, when the interest rate reached 1.83%, the homeownership rate had dropped to 40%. This trend aligns with the general economic principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
The percentage of renters in Cleveland has shown a slight increase over the years, mirroring the decline in homeownership. In 2013, 58% of housing units were renter-occupied. This percentage increased to 60% by 2014 and has largely remained at that level through 2022. Average rent prices have also seen a steady increase. In 2013, the average rent was $631 per month. This figure rose consistently year over year, reaching $725 in 2019 and then jumping to $909 by 2022, representing a 44% increase over the nine-year period. This rise in rent prices, coupled with the increasing renter population, suggests a growing demand for rental properties in Cleveland.
Looking at the most recent data, the average home price in Cleveland slightly decreased to $101,837 in 2023 but is projected to rise to $107,867 in 2024. This represents a 5.9% increase from 2023 to 2024. Interestingly, federal interest rates have also risen significantly, reaching 5.02% in 2023 and 5.33% in 2024, which are the highest rates seen in over a decade.
Applying predictive models to forecast 5-year trends, it's anticipated that average home prices in Cleveland will continue to rise, potentially reaching around $130,000 by 2029. Average rent prices are also expected to increase, possibly surpassing $1,100 per month within the same timeframe. These projections are based on the consistent upward trends observed in both home prices and rent over the past decade.
In summary, Cleveland's housing market has shown significant changes over the past decade. The city has experienced a slight decline in homeownership rates, substantial increases in average home prices, and steady rises in average rent prices. The relationship between interest rates and homeownership rates has been notable, with higher interest rates correlating with lower homeownership. As Cleveland moves forward, the housing market appears poised for continued growth in both home values and rental costs, reflecting the city's evolving economic landscape.
