The year 2019 is a challenging but robust one for the Cleveland, OH real estate market. At the end of October, 2019, Zillow has tagged the market as “Hot”, citing a 13.6% increase in home values over the past year.
The National Association of Realtors’ Realtor.com has called it a seller’s market, meaning there are more homebuyers than available homes for sale. The average Days on Market was 64, slightly lower than the 2018 figure.
Will these trends continue on to 2020? Here’s a look at real estate market forecasts for the coming year.
- Supply will remain low and demand strong
The National Association of Realtors predicts that housing supply throughout the US will continue to be tight in 2020, and could reach historic low levels. It appears a good portion of Baby Boomers are content in staying put at where they are, and are not as inclined to move house or downsize as in the past.
Meantime, demand is seen to remain strong, with Millennials leading the pack of new home buyers. It’s predicted that Millennials will make up more than 50% of all homebuyers, outnumbering the Baby Boomers and Gen X buyers combined.
- Home sales will stay flat
Despite the strong demand, home sales are seen to remain flat as a result of the tight inventory. In addition, with the expected moderation of the economy in 2020, buyers are likely to think twice before buying a new home.
Home prices are also seen to remain flat in 2020, with only an 0.8% increase anticipated. As the bulk of the housing demand for the year will be coming from entry level buyers, there’s an expected slowdown of sales for higher priced homes, leading to a relatively lower uptick on home prices.
- There will be greater demand for homes in suburbs
With home prices in downtown cores continuing to soar, and with most new developments in these areas geared toward the luxury market, millennials will continue to look at suburbs for more affordable housing. More and more buyers from this age group are moving to mid-sized cities with a better quality of life and lower cost of living as they hit their 30s and start their own families.
Cleveland is named one of the most affordable housing markets
Real estate portal Realtyhop has named Cleveland one of the five most affordable markets in the US, citing a 1.96% drop in homeownership burden as of May, 2019. With a relatively low population density, there’s a healthier ratio of buyers to available homes for sale in the metro, leading to more affordable housing.
The cost of living in Cleveland is also lower. According to Areavibes.com, the cost of living index in the metro is 88, with the national index pegged at 100. The metro’s index is also lower than the Ohio index of 91.
Cleveland is more recession-proof than other metros
Redfin.com has ranked the Cleveland housing market fourth in the top 10 metros with the lowest risk of a downturn in a recession. The criteria used to determine these metros include more affordable home prices and less volatile economies that are prone to boom-bust swings. This means homes in Cleveland are less likely to see a drop in value in case of a recession.
For more info and insights into the Cleveland real estate market, check out our blog.
With 2020 auguring a mix of bright and not-so-bright spots for the real estate market, you’ll need the guidance of a top Realtor in Cleveland to successfully navigate any market conditions. Call me, Michelle McQuade, at 440.823.2449 or send an email to MichelleMcQuade(at)HowardHanna(dotted)com.