A national ranking of housing markets puts Cleveland on the “most undervalued” list along with Detroit. As ideastream’s Brian Bull reports, several factors are at play.
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In a Forbes list of the five most over-valued and undervalued housing markets, Detroit fell to the bottom, with Cleveland close behind.
The findings show homes in the Cleveland-Elyria-Mentor area were selling at roughly 16 percent less than what they’re worth.
Dennis Keating is a Professor of Urban Affairs at Cleveland State University. He says there are roughly 16,000 vacant and abandoned homes in the area, bringing down the values of those neighborhoods.
“So with a glut of vacant housing on the market, that would tend to drive the price down," explains Keating. "And nationally millennials, due to the job situation, also due to student debt and other factors, are not buying homes as earlier as they might have in the past. Therefore again, lesser demand.”
And as of this year, more than a fourth of Cleveland homes are underwater…meaning owners are paying lenders more on them than their actual assessed worth.
Keating says if prospective buyers are intrigued by the low home prices, they best determine through luck and intuition if a neighborhood is on the rebound or not. And ask themselves what they’re willing to put up with, as some houses may be in various stages of neglect or disrepair.
Meanwhile, on the other end of the spectrum, Forbes put Austin, Texas, as the most overvalued housing market in the nation.