Cleveland’s multifamily market softened through Q3 2025 as elevated vacancy and slowing demand contrasted with steady, modest rent growth. The vacancy rate held at 9.4%, well above the national average, as absorption of 960 units lagged behind a surge of 2,300 new deliveries. On the supply side, the construction pipeline has contracted to roughly 2,000 units, one of its lowest totals since 2020. Rents continued to rise gradually, with asking rents averaging $1,243 per unit, up 1.6% year-over-year, supported by stronger demand in suburban submarkets like South Cleveland, Lakewood, and Avon/ Westlake. Investment activity showed renewed traction, with sales volume climbing for the third straight quarter and private buyers driving most transactions. However, signs of softening appeared late in the quarter, as Downtown’s high-end segment faced rising concessions amid vacancy near 16%.

 

Overall, Cleveland’s multifamily sector remains stable, backed by steady rent gains, slowing supply, and affordability advantages despite elevated vacancy levels.

 

Key Findings

• Vacancy remains elevated at 9.4%, reflecting a market still working through a heavy wave of recent deliveries, especially in Downtown where availability is the highest in the metro.
• The development pipeline has thinned out, with roughly 2,000 units under construction, its lowest level in several years, which should help ease supply pressure once current projects deliver.
• Rent growth held positive at 1.6% year-over-year, led by stronger-performing suburban pockets, though Downtown properties are increasingly turning to concessions as new Class A units lease up.

 

Cleveland Multifamily Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Cleveland Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.3%
• Current Population: 2,071,565
• Households: 895,178
• Median Household Income: $74K

 

Cleveland’s economy continues to evolve beyond its manufacturing heritage, supported by powerful anchors in healthcare, biomedical innovation, and expanding financial services. World-class institutions like Cleveland Clinic, University Hospitals, and MetroHealth drive regional employment, while the 1,600-acre Health-Tech Corridor has attracted more than 170 tech and health-tech companies. Manufacturing remains a key pillar, with re-shoring efforts revitalizing older industrial sites and creating new opportunities for advanced production. Major corporate investment, including Sherwin-Williams’ $600 million headquarters and research campus for 3,500 employees, further strengthens the metro. After years of population decline, the region has posted consecutive annual gains, led by growth in Lorain and Medina counties. Cleveland’s affordability remains a significant advantage, supporting ongoing stability even as the market works through longer-term demographic challenges.

 

Healthcare services is one of Cleveland’s largest industries, and hospital networks Cleveland Clinic, University Hospitals, and Metro Health represent some of the region’s largest employers.

Source: CoStar Group, Inc.

 

Population, Labor Force, & Income Growth

Source: CoStar Group, Inc.

 

Cleveland Multifamily Construction

Cleveland’s construction activity remained elevated in Q3 2025, with more than 1,100 units delivered in the quarter and 2,100 year-to-date, one of the strongest totals in a decade. While Downtown has historically dominated development, recent growth has shifted to Northeast Cleveland and Beachwood, which together accounted for nearly 40% of new deliveries. The pipeline has now thinned to roughly 2,000 units, its lowest level since 2020, though East Cleveland still leads with nearly 800 units underway, driven by the large Belle Oaks redevelopment. Downtown activity has slowed sharply, with just 420 units under construction, the smallest total in almost ten years. Looking ahead, deliveries are expected to pull back by 57% in 2026 as fewer projects break ground, setting the stage for tightening market conditions.

Units Construction Starts

Source: CoStar Group, Inc.

Units Under Construction

Source: CoStar Group, Inc.

Cleveland Multifamily Sales

Cleveland’s multifamily sales activity continued to firm in 2025, with volume rising for the third straight quarter and reaching $88 million in the first half of the year, up 19% year-over-year. Deal flow more than doubled, driven overwhelmingly by private buyers, who accounted for 72% of activity as institutional capital stayed largely absent. Elevated borrowing costs limited larger trades, with only one transaction above $10 million, while most recent sales fell between $1–$5 million. Notable closings included Reynolds Asset Management’s acquisitions of Park Lamont for $21.2 million and The Lumos for $9.4 million, alongside continued demand for value-add assets such as a recent $15.4 million portfolio sale in Parma and Brooklyn. Despite elevated vacancy, steady rent growth and a cooling construction pipeline continue to support buyer interest heading into 2026.

Cleveland Multifamily Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Q3 2025 | Source: CoStar Group, Inc.

• Sales Volume: $18.1M
• Price Per Unit: $384K
• Cap Rate: 8.9%
• Vacancy Rate: 9.5%
• Rent Growth: 2.0%
• Asking Rent Per Unit: $1.2K
• Under Construction: 1.9K units
• Delivered: 1.1K units
• Absorbed: 60 units