Hey friends! Eric here with CamShell with another video for you. This video will focus on the Cleveland real estate market outlook, and answer if we are going to be seeing a slow down. We are going to be talking about something that extremely important when your looking to invest in any market, as well as when your looking to sell. It’s basically the housing trends, and is the Cleveland housing market slowing down? I think the past few years as most of us know, unless you’ve been living under a rock, most of the housing prices and the home sales have been increasing steadily over the past few years. We have seen pretty explosive growth, especially with home and rent prices over the past few years. The growth has been more than average, but is that sustainable and will it continue to happen? Or will we see a market correction in Cleveland Ohio real estate where the prices will stop skyrocketing month after month? And we’re really going to be looking at 2 factors to determine that. Here is a link to the charts on RedFin.com we will be using.
The first factor we look at is median sales price. Median sales price in Cleveland, if you look back to 2018, we have seen very few months where the year over year growth hasent been positive. It’s always been in the green besides 4 months since 2018. We had negative growth, normally below 1%, a total of 4 months since 2018. The 2022 market, as we gather the data from the end of 2022, we’ve actually had 4 straight months of negative year over year growth with a range of 4-16%. Aug, Sept, Oct and Nov the year over year growth dropped each month, which is a significant slow down from what we had been seeing with double digit growth the past few years.
The pricing in Cleveland is certainly correcting. That is going to be due to a higher supply of housing and a smaller pool of buyers. As opposed to it being a sellers market where you could make money buying something one month and than selling it the next month, I’m not saying or expect the prices to go down from where they are, but I don’t think they are really going to be shooting up like crazy over the next year. So I would certainly say pricing wise, Cleveland real estate is slowing down.
Our second factor I’d be looking at to determine if the Cleveland Ohio real estate market is slowing down is the number of houses sold per month. Again, in any large area where you have a increase in population, your always going to see growth in number of sales over the long run. It’s sort of like the stock market where you know with relative certainty that 10 or 20 years from now, your investment will have grown. It’s the same thing with real estate in Cleveland, your almost always going to see growth in the number of homes sold. Some interesting facts are that we have actually had less sold at the end of 2022 than we did at the end of 2021. It’s not normal and I don’t expect that to continue, we aren’t going to see reduced home sales for forever. But it’s certainly not like it had been where the houses are flying off the market incredibly quickly for above asking price.
The rents coming back down the earth have a lot to do with the slow down as well. The out of state and foreign investment in Cleveland has been heavy the last few years, buying up quite a few rentals because the prices in Cleveland are much lower than other large cities, which allows a better return for investors. As the interest rates go up, the buyers have less access to cheap capital. With the rates at 7%, now, less and less buyers are going to be able to buy top of the market properties.
What does this mean if your looking to sell a house in Cleveland? If you have a house you’re a personally looking to sell, I don’t think your going to be seeing as many bidding wars as we have seen the past few years. If you are looking to list on market or sell with a cash offer, there is a good chance the market this winter will see lower prices that last year. If your willing to wait until the summer than you may have a better chance at getting multiple bids. If you are looking to sell FSBO and just want the most money possible, you can also consider selling on terms.