Why LeBron James' return to Cleveland is huge real estate win
Akron and Cleveland rank in bottom ten for price growth
“I’m ready to accept the challenge. I’m coming home.” Those are the words that shocked the basketball world and the rest of us too. In an exclusive essay published Friday in Sports Illustrated, LeBron James announced that he would be returning to play for the Cleveland Cavaliers, after four years as a member of the Miami Heat.
James was born and raised in Akron, Ohio, and still calls himself “just a kid from Akron.” In his essay, he writes that he cares deeply about Northeast Ohio. “My relationship with Northeast Ohio is bigger than basketball,” James writes. “I didn’t realize that four years ago. I do now.”
James still has a home in Akron and returns there every off-season.
Here at HousingWire, we don’t cover basketball, but even we can’t deny the impact that James’ return to Cleveland could have on the economy of Northeast Ohio.
According to a recent report, Cleveland and Akron are among the ten lowest metro areas for home price growth. In fact, Akron ranks the lowest. Homes in Akron have actually dropped in price by 0.2%. Home prices in Cleveland have only increased by 0.1%.
Within Cleveland itself, there’s been huge variation in the growth of home prices. Cleveland’s top performing zip code saw 42.3% annual growth, while its lowest performer saw a drop of 23.3%.
Also among the bottom ten metro areas for price growth are Cincinnati and Dayton.
Also, Ohio has the fifth highest percentage of properties that are seriously underwater. Ohio, with 27% of its homes seriously underwater, only trails Michigan (29%), Illinois (30%), Florida (31%) and Nevada (34%).
Cleveland and Akron are also fourth and fifth on the list of the metropolitan statistical areas with the highest percentages of underwater homes. In Cleveland, 35% of the homes are underwater. Akron is slightly behind with 34% of its homes underwater.
And you’d have to have been living under a rock to not see how much the people of Cleveland and the surrounding areas were hurt when LeBron left in 2010. They were devastated. They burned his jersey in the streets.
The owner of the Cavaliers, Dan Gilbert, penned a letter to Cavaliers’ fans after James left that lived in internet infamy until very recently. In the letter, he called James “our former hero” and personally guaranteed that the Cavaliers would win a championship before the “THE SELF-TITLED FORMER ‘KING' WINS ONE.” The emphasis is Gilbert’s.
Gilbert, by the way, is the founder and Chairman of Quicken Loans, the largest nonbank loan originator. Quicken is no stranger to big basketball news. In March, it "bet big" on NCAA March Madness with the heavily discussed Billion Dollar Bracket.
In his essay, James says that he and Gilbert have spoken about the letter and buried the hatchet. Gilbert shared his excitement about James’ return in two tweets after James’ decision was made public.
Welcome Home @kingjames. I am excited for the fans and people of Cleveland and Ohio. No fans and people deserve a winner more than them.....— Dan Gilbert (@cavsdan) July 11, 2014
My 8-year-old: "Daddy, does this mean I can finally wear my Lebron jersey, again?"...Yes it does, son. Yes it does!— Dan Gilbert (@cavsdan) July 11, 2014
So what’s the upside for Northeast Ohio housing now? Well, clearly the area has no place to go but up when it comes to housing. James’ return will surely galvanize the community and who’s to say that Cleveland won’t become a desired destination?
Heck, the Republican National Committee just picked Cleveland for its 2016 national convention earlier this week. Maybe they knew something the rest of us didn’t.
Now, no one is suggesting that property values will suddenly explode in Ohio just because LeBron is coming home, but let’s just say that housing in Ohio hasn’t exactly been the healthiest lately.
His return can’t hurt. In fact, the good vibes may just spur growth in an area that sorely needs it.
James himself realizes that his presence in Ohio carries great significance. “I feel my calling here goes above basketball,” James writes. “I have a responsibility to lead, in more ways than one, and I take that very seriously. My presence can make a difference in Miami, but I think it can mean more where I’m from.”
So, LeBron, HousingWire extends a nod of respect to you for seeing the bigger picture. It’s about more than just basketball. And who can argue with a guy who just wants to help the community he grew up in?
“I want kids in Northeast Ohio, like the hundreds of Akron third-graders I sponsor through my foundation, to realize that there’s no better place to grow up,” James adds. “Maybe some of them will come home after college and start a family or open a business. That would make me smile. Our community, which has struggled so much, needs all the talent it can get.”