May 16, 2024 - Real Estate

Cash rules everything around Cleveland's housing market

Line chart showing that the share of home purchases made with cash in the Cleveland metro area changed from 26% in January 2011 to 30.8% in January 2020 and dropped to 23.1% in April 2020. In February 2024, the share was 48.8% compared with 34.5% nationally.
Data: Redfin; Note: Includes home purchases with no mortgage loan information on the deed. National data calculated from the 40 of the most populous U.S. metro areas; Chart: Axios Visuals

Nearly half the home purchases in metro Cleveland from January 2011 to February 2024 were made with cash.

Why it matters: All-cash homebuying eliminates the hassle of loans and gives an edge in a competitive market, especially in Cleveland, one of the nation's poorest cities.

By the numbers: 48.8% of home purchases were made with cash, well above the national average of 34.5%, according to Redfin.

  • Cleveland had the third-highest percentage of any city, behind only Jacksonville and West Palm Beach, Florida.

State of play: An increasing number of such purchases in recent years have been made by investors, many of which are out of state, according to The Washington Post.

  • In 2021, 16% of homes purchased in Cleveland were bought by investors, up from 7% in 2015.

The intrigue: The influx of investors — companies or individuals who usually don't live in the properties and look to either flip them to new buyers or rent them — has especially been prominent in Black neighborhoods, according to The Washington Post's analysis.

What they're saying: Last August, Sen. Sherrod Brown sponsored the Stop Predatory Investing Act, which would limit tax breaks for local investors buying up local homes.

  • "So many families who have worked for years saving to buy a house end up getting outbid over and over by outside investors, and they can't afford to compete," Brown said.

The latest: A hearing on the bill took place in April. The Senate has yet to vote on it.

The bottom line: Zillow predicts Cleveland will be a hot housing market in 2024.

  • If recent trends continue, a large percentage of homes purchased will be done with all cash and by corporate investors.

Go deeper: Over 1 in 3 U.S. homes are bought with cash

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