Cleveland is ranked as one of the top housing markets to watch in 2021 by Forbes. The affordability of single-family homes here is especially appealing to remote real estate investors and to people working from home due to pandemic. Cleveland is one of the most recession-resistant markets in the U.S., according to Crain’s Cleveland Business. Successful real estate investors know how to make money in any market cycle. This is one reason why people are investing in Cleveland rental property.
In its in-depth study, “The Fifth Migration: A Study of Cleveland Millennials”, the Cleveland Foundation reports Cleveland ranks among the top 10 U.S. cities for population growth of college-educated millennials. That’s great news for rental property investors, because as CNBC recently noted, rental demand across the country is soaring as more millennials say it’s cheaper to rent than to own.
Cleveland has a city population of nearly 400,000 and a metropolitan population of more than 2 million, ranking Greater Cleveland as the 33rd-largest metro area in the U.S. Population of Cleveland has declined 0.09% year-over-year. Net migration in Cleveland has remained steady, decreasing by only 870 residents since 2018. The median age of people in Greater Cleveland is 41, with about 37% of the population between the ages of 20 and 49. In the City of Cleveland, the median resident age becomes more youthful, dropping down to about 36 years.
While job growth in Cleveland has historically lagged behind some of the city’s peers, a recent report in Crain’s Cleveland Business notes that economic growth in Cleveland surpassed Tulsa, Albuquerque, and Memphis. The unemployment rate in Cleveland is down to just 5.8% (as of Nov. 2020), according to the U.S. Bureau of Labor Statistics (BLS). As the economy in Cleveland continues to recover, job sectors showing the fastest signs of recovery include construction, manufacturing, and financial activities.
When measured by the investment variables of home price volatility, home sales flips, average loan-to-value, and home price-to-income ratio, Cleveland ranks as one of the top four markets with the lowest risk of a real estate dip. Rising home prices in Cleveland are helping to create a strong demand for single-family rental property, with over half of the housing units occupied by renters. Cleveland is one of the top places to buy rental property in 2021 for cash flow and appreciation.
Demand for housing in Cleveland is high and inventory is low, with the average home price up over 15% year-over-year. Cleveland.com reports that buyers need to act quickly, with some homes getting scooped up within a day of hitting the market.