Median Home Prices Up 25% Since Last Year

Median home prices in Cleveland, Akron metro areas on the rebound

By Michelle Jarboe, The Plain Dealer

February 11, 2010, 4:12PM

CLEVELAND, Ohio -- Northeast Ohio house prices rebounded last year, marking a sharp improvement from the doldrums of late 2008.

In the Cleveland-Elyria-Mentor area, existing single-family homes sold at a median price of $110,100 during the fourth quarter -- up 24.7 percent from a year before, according to a report today by the National Association of Realtors. The median sale price for a house in the Akron area rose 22.8 percent from the final quarter of 2008.

These dramatic gains point to a change in the number and types of houses that are selling. In late 2008, home sales in Northeast Ohio had dwindled. The few buyers snapped up foreclosures and other deeply discounted properties. The financial system was in shambles. Banks had curbed lending. Consumers weren't spending.

Median house prices in Cleveland and Akron hit their low point during the first quarter of 2009, falling to $69,900 and $50,100, respectively. Then, a federal income tax credit for first-time buyers helped bring the market back -- attracting shoppers who weren't necessarily looking for the cheapest fixer-upper on the block.

"There was, I would say, a real knee-jerk reaction in '08 that really slowed numbers down, so this isn't a real surprise," said Carl DeMusz, chief executive officer for the Northern Ohio Regional Multiple Listing Service.

From late 2008 to late 2009, Cleveland saw the second-largest price gain of the 151 metropolitan areas in the Realtors report. Akron, where the median sale price was $105,700 in the fourth quarter, ranked third. The top gainer was Saginaw, Mich., where prices increased a whopping 53.5 percent. But the median house sale price in Saginaw was just $67,400 in the fourth quarter.

"I would not characterize it as a price jump, but more as a case of a return to normal home sales," said Lawrence Yun, the Realtors' chief economist. "In the fourth quarter of 2008, most of the transactions had been pure distress sales, perhaps empty homes in distressed neighborhoods. So the transaction price at that time was artificially low."

Nationwide, house prices were down 4.1 percent in the fourth quarter, when compared to a year before. The nation's worst-performing markets were in Nevada and Florida, where developers feverishly built houses and condos during the real estate boom. Now, those once-hot markets are floundering under the weight of unfinished projects, empty houses and foreclosures.