Over the past year, Cleveland’s apartment market was one of the nation’s leaders in revenue growth despite declining occupancy and net move-outs. Cleveland’s solid performance isn’t due to a desirable city for the young population nor for job growth opportunities. The local culture of Cleveland with it being the home of the Rock & Roll Hall of Fame and the nation's second largest theater district is what makes it a desirable location for many. The largest employment sector in Cleveland is the healthcare sector which makes sense with it being that the nation's second-best hospital is located in the city.
Economic diversity and stability have been a large helping factor to keep Cleveland’s apartment market ahead of national norms thanks to the revenue growth seen as of lately. In the year-ending April 2024, apartment revenues in Cleveland climbed 2.4%. However, on the contrary U.S. revenues continue to fall by 0.4%.
During the COVID-19 pandemic, many major markets across the U.S. experienced revenue loss however Cleveland never fell into negative territory and continued to post gains with the lowest being 0.8%, a very appealing stat to investors looking for a great investment opportunity.
Several stable midwest markets made the list for top revenue growth over the past year with Milwaukee, Chicago, Columbus, Kansas City and Cincinnati among those on the list with revenue increases between 2.3% to 2.8%.
Unlike most markets on the list, Cleveland has logged significant negative YoY occupancy change with a 0.9% change. The negative occupancy change means that the outperforming revenue increase was bolstered by rent growth. Asking rents increased by 3.2% in Cleveland in the year-ending April which was the second-best performance among the nation’s largest fifty apartment markets. Meanwhile, average U.S. rents increased only 0.1% in the same time frame.
Meanwhile, Cleveland ranked dead last for annual demand performance among the top 50 markets with net move-outs of 485 units in the year-ending Q1. On a quarterly basis, about 250 units were absorbed in Q1, marking a return to positive demand after two quarters of net move-outs. This shows a positive sign for the market with the prime leasing season right around the corner.
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