Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the Cleveland real estate spreadsheet template.
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Expecting a break in Cleveland's rising prices in 2025? Think again.
Several factors are set to push costs higher, from growing demand to limited availability.
Let's explore why Cleveland's prices are on an upward trend for the coming year.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
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1) Redfin considers the Cleveland real estate market to be "very competitive"
Signal strength: strong
The fact that Redfin ranks the Cleveland real estate market as "very competitive" is a strong indicator that housing prices are likely to rise in 2025. When a market is labeled as "very competitive," it typically means that there is a high demand for homes, which often leads to increased prices as buyers compete for limited inventory.
In Cleveland, the most competitive properties are single-family homes in the suburbs, particularly in areas like Lakewood and Shaker Heights. These areas are attractive because they offer good schools, community amenities, and proximity to downtown, making them desirable for families and professionals alike.
As more people seek to buy these types of properties, the demand continues to outpace supply, which is a classic recipe for rising home prices. This trend is further supported by the fact that interest rates remain relatively low, encouraging more buyers to enter the market.
If the market were to become "less competitive," with more homes available than buyers, this would likely signal a stabilization or decrease in prices, contrary to the current trend.
Source: Redfin
2) Three major websites predict that home prices in Cleveland will rise in 2025
Signal strength: strong
There are three major websites forecasting a positive growth for home prices in Cleveland in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with a prediction of a 5.00% increase, followed by Redfin at 4%, and finally Zillow at 2.60%. The significant gap between these forecasts suggests varying levels of confidence in the market's growth potential.
While these predictions are encouraging, it's important to remember that forecasts should be taken with caution as they are based on assumptions and models that may not fully capture future market dynamics. Therefore, we should consider these forecasts as one of many indicators and later incorporate strong, reliable, and actual data to make a well-informed investment decision.
If these forecasts were predicting a negative growth or a decline in home prices, it would signal a potential downturn in the market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
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3) A local in Cleveland could afford a house in about 2.8 years, which is relatively quick
Signal strength: moderate
In Cleveland, it currently takes about 2.8 years for a local to buy a house, which is relatively short compared to many other cities. This suggests that housing is quite affordable for residents, making it an attractive market for potential buyers.
With a median household income of around $39,041, residents have a decent purchasing power. The median home price is approximately $109,341, which aligns well with the income levels, indicating a balanced market.
Such affordability can lead to increased demand, as more people find it feasible to purchase homes. This demand can drive housing prices upward in the future, especially if the supply doesn't keep pace.
If the time to buy a house were to increase significantly, say to 5 years or more, it might suggest that prices are stabilizing or even declining.
Source: USCensus
4) Cleveland's "Livability" score of 72 indicates a good quality of life
Signal strength: moderate
The livability score of 72 in Cleveland is considered good because it reflects a balance of factors that make the city attractive to residents.
One key aspect is the affordable cost of living, which is significantly lower than many other major cities in the United States, making it appealing for both families and young professionals. Additionally, Cleveland boasts a strong cultural scene with renowned institutions like the Cleveland Museum of Art and the Rock and Roll Hall of Fame, which enhance the quality of life for its residents.
Moreover, the city has a growing job market in sectors such as healthcare and technology, which attracts new residents and increases demand for housing. These factors combined suggest that the housing market in Cleveland is likely to see an upward trend in prices by 2025 as more people move to the area.
However, if the livability score were to drop below 60, it might indicate declining conditions that could deter potential residents and investors.
Source: AreaVibes
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5) In Cleveland, about 37% of homes sell for more than their listing price
Signal strength: moderate
In Cleveland, around 37% of sales close at a price higher than the listing price. This indicates that buyers are willing to pay more than the asking price, suggesting strong demand.
When demand is high, it often leads to increased competition among buyers, which can drive prices up. This trend is a clear signal that housing prices are likely to rise in the near future.
For someone considering investing in real estate, this is a positive indicator of potential appreciation in property values. It suggests that investing now could yield good returns as prices continue to climb.
If, however, the percentage of sales closing above the listing price were to drop significantly, say below 10%, it might indicate a cooling market where prices could stabilize or even decrease.
Source: Zillow
6) Cleveland home values have risen by 8.5% since last year and could keep increasing
Signal strength: moderate
The fact that home values in Cleveland have already changed by 8.5% since last year is a strong indicator of a rising trend in the housing market. This increase suggests that demand is growing, which often leads to higher prices.
Currently, the median home price in Cleveland is around $109,341, which is relatively affordable compared to other markets. Additionally, the median sales price per square foot is around $87, making it an attractive option for potential buyers and investors.
These figures indicate that there is room for growth, and if the trend continues, housing prices are likely to go up in 2025. Investors should consider this as a potential opportunity to enter the market before prices rise further.
However, if the home value change were to drop significantly below 8.5%, it might suggest a cooling market, which could alter the current upward trend.
Source: Redfin
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7) Cleveland's median home price is significantly lower, at 75% less than the "national average."
Signal strength: minimal
The fact that Cleveland still has a median home price 75% below the national average suggests that there is significant room for growth in the housing market. This disparity indicates that Cleveland's real estate is currently undervalued, making it an attractive option for investors looking for potential appreciation.
In Cleveland, the most expensive properties are likely to be luxury homes located in areas like Shaker Heights, where affluent neighborhoods and high demand drive up prices. On the other hand, the cheapest properties are often small, older homes in neighborhoods such as Slavic Village, where economic challenges have kept prices low.
As the city continues to develop and attract new residents, the demand for housing is expected to increase, which could lead to rising prices. Investors should consider that the current price gap presents an opportunity for growth, especially in undervalued areas.
If Cleveland's median home price were to rise to a level closer to the national average, it might suggest that the market has reached its peak, and the potential for further appreciation could be limited.
Source: Zillow
8) In the past decade, Cleveland's home prices have consistently risen by an average of 6.7% each year
Signal strength: minimal
The fact that home prices in Cleveland have appreciated at an average rate of 6.7% over the last decade is a noteworthy signal for potential investors. This consistent growth suggests that there has been a steady demand and price increase in the housing market, which can be a positive indicator for future trends.
While a positive 10-year average home value appreciation indicates a history of demand and price growth, it is important to remember that past performance doesn’t guarantee future results. However, such a track record can still be a valuable indicator to consider when evaluating potential investments.
Investors should be aware that while historical data can provide insights, market conditions can change due to various factors. Therefore, it is crucial to analyze current market trends alongside historical data to make informed decisions.
If the average appreciation rate were to drop significantly, say below 2% over a similar period, it might suggest a different market outlook.
Source: NeighborhoodScout
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So, are Cleveland's home prices set to rise in 2025? Absolutely!
All signs point to a rise in Cleveland's home prices in 2025. The market is currently labeled as "very competitive" by Redfin, indicating high demand and limited supply, which typically leads to price increases.
Three major websites, including Realtor, Redfin, and Zillow, predict a positive growth in home prices, with forecasts ranging from 2.60% to 5.00%. This consensus among experts suggests confidence in the market's upward trajectory.
Additionally, Cleveland's affordability, with a median home price of $109,341 and a median household income of $39,041, makes it an attractive market for buyers, further driving demand. The city's good livability score of 72 and a growing job market add to its appeal.
Moreover, about 37% of homes are selling above their listing price, a clear sign of strong buyer interest. With home values having risen by 8.5% in the past year and a consistent average growth of 6.7% over the last decade, the trend is unmistakably upward.
In summary, Cleveland's real estate market is poised for growth, making it a promising opportunity for investors and homebuyers alike.