MARKET SNAPSHOT
While development activity has slowed in many major markets, Cleveland’s construction pipeline experienced an uptick in units under construction at the close of 2024 compared to the previous year. However, this increase remains well within the market’s capacity to absorb new supply. Currently, units under construction represent 2.3% of existing inventory, which is significantly below the national average of 3.5%.
Upcoming unit deliveries in the Cleveland multifamily market will be concentrated in the Downtown Cleveland submarket, which is expected to account for 37% of new supply over the next 12 months. East Cleveland is the second most active submarket, with 803 units scheduled for delivery in 2025, representing 28% of marketwide completions. Additionally, East Cleveland has 1,068 units under construction, comprising more than one-third of the market’s total development activity.
In total, approximately 2,300 units are projected to come online in 2025, marking an increase of roughly 500 units from 2024. However, net absorption is expected to keep pace with this rise in supply, supporting improved occupancy conditions across the market throughout the year.
Rental demand rebounded strongly in 2024, with nearly 1,900 units absorbed on a net basis, following a subdued performance in 2023. Cleveland’s occupancy rate stabilized at 92.5%, slightly below its 10-year historical average. Absorption was broad-based, however, with demand increasing across all quality segments of the multifamily market.
Looking ahead, new completions are expected to rise in 2025; however, net absorption is forecasted to modestly outpace supply, leading to a slight uptick in the average occupancy rate to 92.6%. Submarket-level performance is projected to closely mirror the broader market trend, with steady demand across asset classes. Cleveland’s relative affordability continues to provide renters with flexibility, allowing for movement between high-end, mid-tier, and lower-tier properties, further supporting balanced demand across the quality spectrum.
Cleveland’s rent growth has consistently outpaced the national average over the past two years. In 2024, it was among a select few multifamily markets to achieve annual rent increases exceeding 3.0% in each quarter. This sustained upward trajectory is largely driven by Cleveland’s measured development pipeline, which has effectively balanced supply and demand, supporting steady rent appreciation.
Looking ahead, Cleveland is expected to maintain its solid rent growth trajectory through 2025, with rents projected to rise by 3.2% year-over-year by the fourth quarter. The West Cleveland and Brooklyn Heights submarket is anticipated to lead the metro, with rent gains approaching 5.0%. Furthermore, all ten Cleveland submarkets are forecasted to achieve annual rent increases exceeding 2.5%, underscoring the market’s strength and resilience of Cleveland’s multifamily market during this current cycle.
12-month period ending November 2024
Cleveland’s multifamily market is poised for steady performance in 2025, supported by a balanced supply-demand dynamic and the metro’s resilient economic foundations. Occupancy rates are projected to rise slightly to 92.6% by year-end, as net absorption modestly outpaces new completions. Rent growth is expected to remain solid at approximately 3.0%, further reinforcing market stability.
The metro’s manageable construction pipeline, affordable rents, and diverse economy—anchored by the finance, healthcare, and manufacturing sectors—position Cleveland for continued stability and strong performance compared to national trends. Healthcare remains a cornerstone of the local economy, with major networks such as Cleveland Clinic, University Hospitals, and MetroHealth serving as key employers. Cleveland’s reputation as a healthcare hub is further supported by the Health-Tech Corridor (HTC), a 1,600-acre innovation district that links Downtown Cleveland to University Circle. The HTC is home to hospitals, academic institutions, business incubators, and over 170 health-tech companies, underscoring the metro’s leadership in health and technology.
