Problems in the Cuyahoga County and Cleveland Market

Recently, Cuyahoga County, Ohio, has published the results of the study conducted on the 2007 foreclosure crisis and the current real estate market recovery. The results presented have revealed that the improvement is uneven and that despite this, there are still many foreign and out-of-state investors in the market who are increasingly interested.

The author of the report, which includes data up to 2022 and the recent announcement by the county about the 32% increase in mortgage rates for homes, emphasizes that despite the median sale price of a property throughout the county reaching $200,000, these significant increases in the real estate market will lead to higher taxes for most homeowners.

He also highlighted that despite the increase in home prices and sales values in much of the county, prices have not yet recovered in most of the East Side of Cleveland and in some inner eastern suburbs.

The positive aspect highlighted by the report is that homes priced below $100,000, and often below $50,000, offer affordable housing opportunities to low- and moderate-income families. The negative aspect is that mortgage loans for homes in this price range are often not available.

The report also criticizes lenders for not adequately addressing the needs or problems generated by mortgage credit, which disproportionately affect predominantly black communities. It also highlighted concerns about large offers from foreign investors that surpass those of potential local homebuyers.

Currently, the East Side district of Cleveland has average prices of $55,000, which would undoubtedly be a good opportunity for locals, especially those families with limited incomes, to access decent housing, but instead, they have attracted foreign investors.

According to the report, between 2004 and 2020, East Side Cleveland, the inner eastern suburbs, and the West Side are areas where the largest number of homes owned by foreign investors are concentrated, consequently, the real estate market in these areas is increasingly under the control of foreign owners.

And although in some years the housing prices fell, it did not cause a major problem for investors since most of the homes in these areas are not owner-occupied.

In summary, the report determines that the ongoing impact of foreign investors converting properties into rentals, along with low property prices and price stability in rental contracts, results in a low level of net worth and wealth, especially for black residents who were affected by the foreclosure crisis.

The past crisis that led thousands of homeowners to face foreclosure processes plus the abandonment in these areas due to the lack of equity, generate many more difficulties for all residents who wish to compete with investors who have cash and can pay much more easily for the affordable homes that the county has.

What the report highlights the most is the problem that county residents have when applying for a mortgage to buy a home, especially in the East Side district of Cleveland where loans to purchase cheaper homes are not always available.

Available foreclosures:

East Side of Cleveland: 150 homes available.

East Inner Suburbs: 120 homes available.

West Side of Cleveland: 100 homes available.

By Elias DaSilva | October 2, 2024.