Q2 2025 Cleveland Multifamily Market Report
Market Overview
As of Q2 2025, Cleveland’s multifamily market is navigating a transitional phase with stabilizing fundamentals following years of supply-demand imbalance, which was intensified by the pandemic and accelerated deliveries. While vacancy remains elevated at 8.7%—above both the metro’s long-term average and the national benchmark—the quarter brought encouraging signs of improvement. Over the past 12 months, the market absorbed 1,500 units, a figure 30% above pre-pandemic levels, led by strong demand for Class B, mid-priced units in submarkets such as South Cleveland and Avon/Westlake, where tightening vacancy supported rent growth in the 3–3.5% range. This marks a notable turnaround from the record deliveries and negative net absorption that defined 2022–2023, suggesting the market is beginning to recalibrate heading into the second half of the year.
Despite persistent vacancy challenges, Cleveland ranked among the top ten U.S. markets for rent growth, recording a 2.2% year-over-year increase— double the national average of 1.1%. Average asking rents reached $1,245/month, with the market retaining a competitive edge at 30% below the national average and roughly 10% under nearby Cincinnati. Construction activity remains significant, with 2,200 units delivered in the past year and 2,400 more underway, exerting the most pressure on Class A properties where vacancy is 13.6%, compared to 8.1% for Class B and 7.7% for Class C.
Downtown and East Cleveland have been development hot spots, with projects such as The Bell and Silver Hills at the Flats contributing to supply expansion. However, construction starts have slowed to multi-year lows, indicating a likely pipeline cooldown that could help ease vacancy pressures in 2026 while supporting a more balanced and sustainable growth trajectory. Overall, Cleveland’s multifamily sector appears positioned for gradual recovery if demand continues to strengthen.
Under Construction
Source: CoStar Group, Inc.
Cleveland multifamily shows signs of stabilization as demand rebounds in Q2 2025.
Supply & Demand Dynamics
Source: CoStar Group, Inc.
By the Numbers
- Sales Volume: $62.9M
- Rent Growth: 2.4%
- Vacancy Rate: 8.5%
- Cap Rate: 8.8%
- Market Asking Rent Per Unit: $1,248
- Units Under Construction: 2,652
- Units Delivered: 305
- Units Absorbed: 592 | Q2 2025 | Source: CoStar Group, Inc.
Sales
On the capital markets front, sales activity remained subdued, with $113 million in volume over the past 12 months, well below the 10-year average of $172 million. The majority of deals were below $10 million, reflecting a market increasingly driven by private buyers and value-add investors targeting smaller Class B assets. Cap rates remained elevated, and the absence of larger institutional deals signals continued investor caution amid high interest rates.
While fundamentals are stabilizing, Cleveland’s multifamily outlook is not without headwinds. The metro continues to grapple with population loss, shrinking by 0.6% from 2020 to 2024, and maintains above-average exposure to struggling sectors like manufacturing. Nonetheless, submarkets with strong healthcare and education anchors—such as University Circle—may offer resilience, especially as affordability and a slowdown in new supply begin to rebalance market dynamics.
Cleveland Multifamily Sales Trends
Source: CoStar Group, Inc.
