Back when the pandemic first started, there was plenty of pessimism about the real estate market. Pundits said that with people shuttered indoors, house hunting would come to standstill and home prices would crater.
While housing demand and prices indeed dipped in the early months of the pandemic, the property sector didn’t just weather the pandemic—it actually grew.
According to Realtor.com’s Housing Market Recovery Index, select real estate markets recovered to pre-pandemic levels as early as mid-July last year. More importantly, many others surpassed demand from before the epidemic hit.
As 2021 dawns upon us, many wonder if this upward trajectory will continue into the new year. Fortunately, the real estate forecast for Cleveland looks to be very promising.
Cleveland on the rise
Recently, Forbes ranked Cleveland fifth on its list of top housing markets to watch in 2021. This ranking was arrived at by using housing data from Zillow and Redfin, including factors like home value appreciation, property sales, and available inventory.
The article goes on to say that from October 2018 and 2019, home inventory in the area ranged between 8,300 to 8,700 available listings. In October 2020, however, that number fell to 4,800—a clear sign of increased demand.
This is consistent with earlier reporting from CrainsCleveland.com, which found that home sales in Northeast Ohio were up 17% in November due to intense demand and scarce supply. Furthermore, home prices in the area increased by 19.3% year on year.
Once-in-a-decade factors
The current pandemic is an economic headwind unlike any in recent history. But it also brought with it several factors that helped the real estate industry thrive.
Shift to remote work and study
After the lockdown, people were suddenly free to work or study anywhere they wanted to. As such, they no longer had to live in pricey cities like New York or Los Angeles because they worked there. They could simply move to cheaper cities where they could get a far bigger house for a much smaller price. For instance, the average home price in Cleveland is just under $80,000—considerably lower than the national median price of $263,000.
Exodus from big cities
The math is simple: the more densely populated the area, the higher the risk of contracting COVID-19. This has seen people leaving big cities in favor of less congested locales. As it happens, a Lending Tree study found that Cleveland was the preferred destination of people moving out of large downtown cities. Joe Marinucci, president of the Downtown Cleveland Alliance, says that the city’s sporting events, entertainment options, and lakeside location were just some of the reasons why the city is so popular for out-of-state residents.
Low mortgage rates
There are predictions that mortgage rates will rise now that COVID-19 vaccines are being deployed, but for now they are hovering near record lows. This presents an excellent incentive for people to purchase a home in 2021 before the rates increase—after all, shaving even 1% off their mortgage rate can save them thousands of dollars over the life of their loan.
Indeed, there has never been a better time to buy or sell a house in Cleveland. If you’re in the market for real estate, partner with Michelle McQuade Real Estate, the leading team in the area. Contact us at 440.823.2448 to learn more about our industry-leading services.
And for the latest information on Cleveland’s promising real estate market, be sure to read our other blogs, too.