All Forum Posts by: Cole Puterbaugh

My experience has been that even if you have a second appraisal, most lenders will base their lending decision on the lower appraised value. And all the more so if, as you mentioned, the comps support the $138K appraised value.   If obtaining the cash difference is not an option, you may ask the seller to lower the price to match the appraised value. 

It ranked 4th in the country in 2019 by number of people lost, 9Th by percent of people lost. They lost another 1.1% in 2022 alone. So they’re definitely still shrinking. The question is are they going to bulldoze those empty houses or are values going to drop? You can’t have less people and rising prices unless you’re destroying inventory. Especially if anyone is still building new homes. 

They’ve gone from over 900k to under 375k, that’s a big drop. They have zero eras of gaining population in 70 years. I’m guessing the draw of small, 70 year old homes with small electrical panels, lead paint, asbestos, maybe a single car garage, and single pane windows in a frigid climate with high taxes is losing some of its appeal. 

As long as the city has cut its budget more than 50% then the tax burden per citizen won’t skyrocket. Especially if they get hit by the commercial loan apocalypse. 

Well, it is and it isn't. 

Summary:
The population overall is decreasing but the city's investment is on a ridiculously sharp incline.

Detail: 
From 2000 to 2010, the population had a 17% decline. From 2010 to 2020, the population fell 6% The population has been decreasing since the 1940s. Most of the decline is in the toughest areas like Glenville and Hough.

So what is the "isn't" part? Downtown. It's population has increased by 40%. Why?

The last few mayors have been investing heavily into the city and I'm not talking tidbits here/there. In the past 7 years, they've implemented new housing communities by tearing down old areas. Downtown now has a large gathering area with an ice skating rink, a gambling casino, condos galore, shopping plazas and restaurants all around the Rock-n-Roll Hall of Fame, and even the flats now has a new design.
And that was just Downtown 2.0 where they are WIP on Downtown 3.0 now which looks serious.
I haven't even described all the work Cleveland Clinic has done, which is massive. Its ranked #2 in the US.

Forbes recently ranked Cleveland as one of the top 15 emerging downtown cities in the country.


Conclusion:
Is Cleveland dying? As you can tell, its just the opposite. Its not a city where the pop is going down and the city simply doesn't care.
The only thing you should be worried is the missed opportunity if you were just to look at the one statistic w/out diving deeper.
Caveats? (1) Know the area you are investing! Don't look at an internet posting w/ its price and say "ok". Research that specific area. Also, Homes used to appreciate ultra slowly but that has changed. (2) The mayor stated one of the biggest problems is outside investors buying the homes and letting them decline as they don't care (i.e., slumlords). If you buy, ensure things are up to-par, as I don't know what they're going to do to combat this. There are a ton of MFHs there so have at it!!

Sources: 
Census data per community: https://planning.clevelandohio...
https://www.clevescene.com/new...
https://www.clevescene.com/new...

 More or less, this is every larger city in the Midwest.

Hi Cole,

Being an investor in Cleveland and having been born and raised in the area for the past several decades, Cleveland has seen growth and reinvention. To be clear, I am biased being an investor in the area and a Realtor. However, Cleveland has had significant economic diversification with development in healthcare, higher education, and technology sectors. Below are some examples. From a numbers perspective, Cleveland has seen over a 15% increase in rents, and the year to date has seen a 1% increase in home prices (the national average is -1%). 

1. Medical and Educational Growth: Cleveland is home to world-class institutions such as the Cleveland Clinic and Case Western Reserve University. These establishments attract a significant population of students, medical professionals, and researchers, and contribute significantly to the city's economy.
2. Downtown Revitalization: Over the last decade, there's been a surge in revitalization efforts in Downtown Cleveland and several neighborhoods, leading to an increase in demand for residential and commercial real estate.
3. Emerging Tech Hub: Cleveland is gradually establishing itself as a tech hub, with numerous tech startups and companies setting up their base in the city. This growth in the tech sector could potentially attract a younger, professional population looking for urban living.
4. Opportunity Zones: Some parts of Cleveland have been designated as Opportunity Zones, which provide tax incentives for long-term investments. This initiative could spark further economic development and real estate growth in these areas.
5. Infrastructure Projects: The city has been investing in infrastructure projects, such as public transit and the revitalization of public spaces, which can increase the attractiveness of the area.
6. Overall, I continue to invest in the Cleveland area and have achieved both cash flow and appreciation. But there are pros and cons to every market, and Cleveland is no different. 

There is likely an easement in place that allows you to use the neighbors drive through to access your property