Cleveland Multifamily Market Report
Cleveland Key Findings
- With a rent growth of 2.8%, Cleveland ranks among the top 10 markets for rent growth nationwide.
- High demand is concentrated on upper-tier units, with 1,000 units absorbed during Q2 and Q3 2024.
- Downtown Cleveland leads in new construction, accounting for 35% of the market’s recent supply.
By the Numbers
- Units Delivered: 328 ↓ from Q3 2024
- Units Absorbed: 391 ↓ from Q3 2024
- Sales Volume: $7.8M ↓ from Q3 2024
Cleveland Demographics
- Unemployment Rate: 4.2%
- Current Population: 2,062,058
- Households: 897,443
- Median Household Income: $69,221
While employment levels in Cleveland are below pre-pandemic levels, the metro is experiencing growth from its thriving healthcare segment. Cleveland Clinic and University Hospitals are two main employers for this sector. Also, Cleveland Clinic has an expansion planned for three new facilities that will create 1,300 new jobs. On the other hand, Sherwin-Williams is planning on investing $600 million in its new headquarters downtown, along with other expansions. The company’s additions will bring in 3,500 employees.
Cleveland Multifamily Market Performance
Cleveland is beginning to note decreased vacancy levels compared to metrics over the prior two years. During the first three quarters of 2024, the market noted 1,330 units absorbed, around 30% above levels prior to the pandemic. Absorption levels have been highest for the Class A and Class C sectors, with absorption for Class C units in Q3 2024 noting the greatest level in three years.
Rent growth has continued to increase in Cleveland, with Class C units noting the most improvement. This sector marked rent growth of 3.5% during the first half of 2024, which is above its level from pre-pandemic. Also, the South submarket recorded the strongest rent growth at around 7%. The area stands out for move-ins, with the suburbs of Strongsville, North Royalton, Brunswick, and Brecksville located nearby.
Cleveland Construction Activity
Construction levels are still elevated here as around 3,000 units remain underway. This development environment is expected to continue until 2025. Apart from the Downtown area, East Cleveland is also a target for new construction. There have been 460 units delivered here over the past 12 months; this area is beneficial for renters due to its proximity to Cleveland Clinic and Case Western Reserve University.
Sales Performance
Sales activity has consistently been on the rise, with the majority of sales throughout the past year for properties ranging from $1 to $4 million. Private buyers have been the most active with these transactions, accounting for two-thirds of sales momentum.
