CSU Study: Cleveland House Prices Dropping, Suburbs Holding

Tuesday, August 4, 2009
Topics: Economy
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In the aftermath of the mortgage crisis, statistics on home values are a worry for many homeowners throughout Northeast Ohio. But they don't necessarily give a true measure of a single home's actual worth. Foreclosed properties drive down average and median home prices; but when you separate them out, the picture can look a lot different. A new study out of Cleveland State University does just that. ideastream®'s Mhari Saito reports.

Brian Mikelbank at CSU’s Levin College of Urban Affairs started separating local home price trends for foreclosed and non-foreclosed properties about two years ago. He knew Cleveland’s home prices are historically pretty stable and he thought that even though national home prices were moving like a roller coaster, not a lot had changed here.

Brian Mikelbank: In the market for houses not impacted by foreclosure through about the end of 2007, those prices have been stable. The price decreases everybody hears about those were really driven by the impacted part of the market, the part of the market that’s been in foreclosure.

That trend has stayed true for non-foreclosed houses in Cleveland’s suburbs. That’s the good news. But inside the city limits, it’s a different story. On the west side of Cleveland, home prices for non foreclosed houses fell about 15 percent. And on the east side, Mikelbank says the median price of houses not in foreclosure nosedived in late 2008, falling about 60 to 70 percent. Part of the problem, he says, is that about 90 percent of all single family home sales on the city’s east side are foreclosures.

Brian Mikelbank: Consumers are not distinguishing between properties that have been through foreclosure and properties that haven’t.

Mikelbank says a worry is that the number of foreclosed homes for sale is still growing in the region.

Additional Information

Housing Market Indicators June 2009 Update by Maxine Goodman Levin College of Urban Affairs, Cleveland State University

More In This Series...

This feature is part of the series Mortgage Meltdown.