Cleveland Multifamily Investment Forecast
Tight Suburban Vacancy and Quest for Yield Broaden Cleveland's Buyer Pool
Strong fundamentals persist outside central Cleveland. Robust demand for suburban units, which account for more than 90 percent of Cleveland's inventory, puts metro vacancy at a more than two-decade low entering 2022. Moving forward, the combination of increasing home prices, improving hiring velocity and a moderate multifamily pipeline outside the central business district are poised to keep near-term apartment fundamentals strong. Spanning the past five years, the metro's median home price rose by 50 percent, double the pace of rent growth. While the metro is considered a low-cost market for homeownership, this disparity may keep prospective buyers into the rental pool this year as catalysts for suburban job growth emerge. For example, Nexen Tire will relocate its headquarters to Richfield in 2022, while Park Place Technologies is slated to bolster staff in Mayfield Heights. Additionally, Sherwin-Williams is making progress on a new research and development center in Brecksville, which is estimated to create 3,000 construction jobs, many of which will be established this year. Job gains in suburban submarkets will occur at a time when availability is around 3 percent and just 600 units are slated to come online this year. These conditions are poised to aid existing properties with available units.