Desperately Seeking Stability in Cleveland's Fragile Housing Market

While most of the rest of the country was watching housing values inflate in 2003 and 2004, Cleveland was standing outside the bubble: its home values changed very little during the peak of the housing boom. But Cleveland didn’t miss the part where the bubble burst. Home sales had actually been declining since 2004, and by the time the national mortgage meltdown hit, Cleveland had spent almost two years watching its rate of distressed mortgages rise steadily. The share of distressed mortgages in Cleveland has been consistently higher than the national average every year since 2000. A recent spotlight report [PDF] from the Department of Housing and Urban Development brings the city's plight into sharp focus.

“The housing market in Cleveland remains fragile – with low property values, deeply discounted properties affecting neighborhood values, and many severely underwater mortgages,” the report notes.