Thirty years ago, Cleveland's manufacturing base was strong and vibrant. Since then, however, it has shrunk, as multimillion dollar corporations left the city, taking thousands of jobs with them and leaving behind an uncertain real estate market.
Smart Business spoke with Norman Millstein, President of Multi Builders Inc., developers of multi-family homes and apartment complexes, about Northeastern Ohio's real estate market and its future.
How does the declining population affect the real estate market?
Because there is a smaller influx of people, there are fewer buyers that need less product, creating a depletion in store sales and jobs. With fewer employment opportunities, significantly fewer people move to Cleveland, causing a reduction in home sales.
Why do we have a negative growth rate?
Cleveland has lost industry and manufacturing firms to areas offering warmer climates and better economic incentives. These regions have proven to be areas of dynamic population growth, giving companies a greater pool of employees. Growth can be increased (with) ... incentives to both industry and residents (such as) free land, good public transportation, easy access, tax abatement and cheaper utilities.
What houses are presently selling?
(Those) in the medium price range -- $200,000 to $500,000. (There are) requests for larger, more luxurious amenities throughout the home, making use of the latest technologies available. ... Medium-priced condos are the fastest-selling segment anywhere, from $150,000 to $300,000, for singles as well as couples. If Cleveland has no increase in population, there are fewer potential buyers.
(Higher-priced homes) are not selling quite as fast, even though there is still a small market for them, because they are usually sold to corporate executives moving into an area. The resale value has dropped because there is no longer a plethora of buyers in this price range.
What type of new construction is most active?
Residential condominium housing. Also some commercial construction, such as the building of Legacy Village and Eaton Collection, which is bringing in stores that have never been seen in the Cleveland area before. How to reach: Multi Builders Inc., (216) 831-1400
Editor's note: Alana Millstein is the daughter of Norman Millstein.