CLEVELAND, Ohio — While 2020 saw a booming housing market both locally and nationally, many predominantly Black and poverty-stricken areas of Cleveland and Cuyahoga County did not see comparable levels of interest, according to data from a local researcher.
Many of those areas are on the city’s East Side and in the eastern inner ring suburbs, and were also hardest hit by predatory lenders and foreclosures during the 2008 housing crisis. While other parts of the county also saw people lose their homes, the housing markets in predominantly white suburbs either fully recovered from the crisis or surpassed previous highs, Western Reserve Land Conservancy’s Thriving Communities Institute Senior Policy Advisor Frank Ford said.
(You can read Ford’s report here or at the bottom of this story.)
Even as home sale prices went up in recent years, a trend that mostly continued county-wide in 2020, the housing market’s upswing during the coronavirus pandemic didn’t benefit many majority-Black areas nearly as much, Ford’s research showed. In Cleveland, the median home sale prices on the West Side nearly matched a previous peak in 2005.
On the East Side, where vacancy and blight still hinder recovery, the median prices were 44% of a previous peak, also in 2005.
Save for University Circle, one of the hottest markets in the county where the median home price in 2020 was $233,500, many parts of the East Side saw homes sell for below $50,000. According to Ford, almost all the inner ring eastern suburbs fared better but still lagged the western and outer suburbs.
“The suburbs have recovered significantly (from the housing crisis) more than Cleveland, generally, and certainly the East Side of to Cleveland,” Ford said in an interview last week.
Ford presented his data, which looked at 20 years of home sale prices in Cleveland’s neighborhoods and the county’s 58 suburbs, during a virtual conference on Tuesday that focused on a $30 million county housing program to rehabilitate homes and improve specific neighborhoods and suburbs.
His research comes in the midst of what real estate agents said is a boom for home sales, fueled by the Federal Reserve’s decision to lower interest rates to combat a pandemic-fueled recession and by a lack of inventory on the market. Prospective buyers have told stories of getting in bidding wars with others, while homes regularly go for $30,000 or $40,000 over the asking price.
Ford’s presentation was designed to show that more resources, such as the aforementioned county housing program, would be necessary to help many of these neighborhoods recover to levels anywhere near other parts of the county.
A banner year
The data doesn’t dispel the idea that 2020 was a banner year for home sales but rather gives a fuller picture of what areas benefitted.
Independence-based service MLS Now reported that 16,684 listings sold in the county in 2020, compared to 15,800 in 2019. The average sale price was $199,128, while in 2019, it was $184,583.
This year also got off to a strong start, with an 18.2% increase in listed homes sold in January compared to the same month in 2020, according to MLS Now.
Ford’s research looked at homes divided into up to three units, as the owners often live in one of the units while renting the others out to tenants. He excluded sheriff’s sales.
When factoring in homes that people sold without the help of agents and vacant lots that sold for more than $100,000 – a pretty good sign that a house will eventually go there – sales decreased by 2% county-wide in 2020 from the year before, according to Ford’s data.
The largest decline was in Cleveland, bogged down by a lack of sales on the East Side, Ford wrote, noting that certain neighborhoods such as Ohio City and Tremont still saw rising sale prices and high interest from prospective homeowners.
Factors in slow sales
Judy Gorbett Darwal, a past president of the Akron Cleveland Association of Realtors and an owner of RE/MAX Trinity in Brecksville, said she saw and heard about home sales in areas of the county that don’t usually see as much activity. With low interest rates and a lack of homes for sale, cities like Parma, Garfield Heights and Maple Heights saw renewed interest, she said.
“In 32 years, never have I seen a year like this, ever,” Gorbett Darwal said. “It’s mind-boggling to me.”
Still, there are Cleveland neighborhoods and suburbs that she hadn’t been asked about in years due to the reputation, fair or not, of being poverty-stricken and having high levels of crime, she said.
Ford said that more homeowners may not have sold in 2020 because they felt uneasy about letting strangers into their houses during a pandemic. He also thought some sellers might be holding on to their homes because of a tenuous economy and a fear that they wouldn’t find a new house quickly enough once their current one sold.
But there are people want to live in many of the neighborhoods with lower sale prices, said Henry Stoudermire Jr. of McMullan Realty, headquartered in Cleveland’s Lee-Miles neighborhood. He said a significant impediment to these neighborhoods is that banks still do not give enough mortgages or home repair loans to Black residents in more impoverished areas of the city.
Stoudermire also feared for the future of many of these areas, explaining that the sales that did happen on the East Side were often from out-of-town investors, a trend he fears could hinder any chance of improving those neighborhoods. If an owner lives outside of Ohio, doesn’t maintain the property and doesn’t require a tenant to do so, how will the neighborhood look a few years down the line, he wondered.
“Investors are not going to stop buying,” Stoudermire said. “The economy’s better in Cleveland. How do you make the blue light go on for homeownership (by Cleveland residents) as opposed to investors?”
At a meeting Monday, a Cleveland housing official said that the city was considering creating ordinances to force out-of-town landlords to keep up their properties.
County housing program
Ford presented the data while he moderated a forum put on by Organize! Ohio and Cleveland State University called “Recovering and Rebuilding: The Role of The Cuyahoga County Housing Program.” The focus of the forum, which included representatives from the Cuyahoga Land Bank, the county and other agencies that deal with housing, will be on a program the County Council enacted in 2019 to invest $5 million each year over six years into rehabilitating homes, building new ones and helping with small mortgages and repair loans, all in the hopes of improving certain city neighborhoods and suburbs.
Land Bank Chief Operating Officer Kim Kimlin said in an email that the $5 million in county money spent in 2020 went toward the organization renovating seven homes and paying outside companies to renovate 24 others.
The organization also bought 10 more homes to renovate, and money was used to help pay to build 15 new homes, Kimlin said. Additional money went toward building 32 homes by outside organizations, and other home repair loan and small mortgage programs.
Gus Frangos, the Land Bank’s president and general counsel, said an interview Monday that the money is not going to a city like Hunting Valley, the wealthiest Cleveland suburb. At the same time, the investment must be made in areas that already have some momentum. That way, growth can continue, he explained.
“It’s not responsible to take money and spend it where there is no pulse,” Frangos said.