House prices in the Cleveland area rose notably last year, but nowhere near as much as they did in many other major metropolitan areas.
Nationwide prices posted a 6.3% annual gain, with cities including Seattle, San Francisco and Las Vegas leading the way.
Among 20 major markets, Cleveland trailed most of the pack, based on data tied to sale prices of single-family homes from the S&P CoreLogic Case-Shiller Indices. Only Chicago and Washington, D.C., posted slimmer annual increases.
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In a news release, David Blitzer of S&P Dow Jones Indices expressed some anxiety about seemingly ceaseless price growth, which is being driven in part by scarce listings of existing homes and a years-long drought in new construction.
"The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility," said Blitzer, managing director and chairman of the index committee.
Prices have been rising much faster than the rate of inflation. And they’ve been far outstripping wage gains, making it difficult for some renters to become buyers and some existing homeowners to move.
"The stage is set for another tough home buying season. … Starter-home buyers will again bear the brunt of frustration as affordability remains out of reach, exacerbated by mortgage rates’ marching upwards to usher in 2018," Cheryl Young, senior economist for real estate data company Trulia, wrote in an email.
In the Cleveland-Elyria-Mentor area, prices still haven’t fully recovered from the recession of 2007 to 2009. Based on Case-Shiller’s math, house prices here are at their spring 2004 levels, down 5% from their pre-crash peak.
Across the country, prices topped their pre-crisis high by 6.3% in December, according to the report. And economists expect the climb to continue, unless there’s a dramatic reduction in the costs and logistical challenges of homebuilding — or existing homeowners suddenly become more willing to sell.
"It feels like the market has been waiting for an inventory dam to burst, and for many more properties to magically appear for sale that might help cool competition and rapidly rising prices," Aaron Terrazas, senior economist for real estate data company Zillow, wrote in an email. "But wishing has not made it so, and low inventory looks to be the norm going forward."
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