Home Price Growth Decelerates, Cleveland Market Remains Strong

CLEVELAND — The nation’s red-hot real estate market finally showed signs of slowing last month, but what could that mean for Northeast Ohio?

For the first time in several months, the U.S. National Home Price NSA Index reported a 19.5 percent annual gain in September, down from 19.8 percent in August. Other metrics showed an even more significant drop-off in home price growth.

Like the rest of the U.S., Cleveland's real estate scene has been frantic in 2021. A combination of factors may have driven the market’s frenzied pace, according to Michael Goldberg, a professor at Case Western Reserve University’s Weatherhead School of Management.

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Remote Work

One of the key factors that heated up Northeast Ohio’s real estate market was a short supply of homes and an influx of workers. Ohio has long been a net exporter of talent, meaning more people leave the Buckeye State than settle here for work.

However, when the pandemic started and offices were forced to shut down, Goldberg said, many companies began to rethink the benefits of remote work. With more freedom, some workers chose to return to their roots in Northeast Ohio.

“When you think about raising a family, there’s a lot to like about Cleveland -- the cost of living, quality schools, affordable housing,” Goldberg said.

Slowed, But Still Hot

While the month-over-month gains in home value may be slowing, the Northeast Ohio real estate market is still hot. Patch’s partner, Redfin, estimates that the average Greater Cleveland home sells within 33 days of being placed on the market.

Year-over-year home values are up 6.6 percent in the region, Redfin estimated. Goldberg believes that could be part of a talent influx, with new Ohioans coming from towns like San Francisco and New York and buying larger homes in Greater Cleveland.

The median home value for houses sold in October 2021 in Northeast Ohio was $120,000, according to Redfin.

According to S&P indices, Cleveland’s metro real estate market saw a 14.1 percent increase year-over-year in home values in September. However, month-to-month growth was flat after growing 0.8 percent from July to August.

Retention and Attraction

Cleveland’s hot housing market largely reflects both a new ability for renters to purchase homes and, possibly, an influx of talent to the region.

“Acceleration in prices and tight housing markets reflect that we could be heading in the right direction on talent retention and attraction,” Goldberg told Patch.

S&P DJI Managing Director Craig J. Lazzara agrees.

“We have previously suggested that the strength in the U.S. housing market is being driven by households’ reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes,” he said.