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Average Home Values and Ownership in Zip Code 95618: A Decade of Change Near UC Davis
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Zip code 95618, located in Davis, California, is a vibrant area known for its strong academic presence due to the University of California, Davis. This zip code has experienced fluctuating homeownership rates and significant changes in average home and rent prices over the past decade.
The homeownership rate in zip code 95618 has shown a slight downward trend from 2013 to 2022. In 2013, the homeownership rate was 58%, which remained relatively stable until 2016 when it dipped to 55%. There was a brief increase to 59% in 2018, but by 2022, it had returned to 55%. This trend coincides with the steady rise in average home prices. In 2013, the average home price was $498,044, which increased to $874,794 by 2022, representing a 75.6% increase over nine years. This substantial rise in home prices may have contributed to the overall decline in homeownership rates, as affordability became an increasing challenge for potential buyers.
Federal interest rates have played a significant role in homeownership trends. From 2013 to 2016, when interest rates were exceptionally low (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable. However, as interest rates began to rise more substantially from 2017 (1.00%) to 2019 (2.16%), we see a slight increase in homeownership, possibly due to buyers rushing to secure mortgages before rates climbed further. The dramatic drop in interest rates in 2020 (0.38%) and 2021 (0.08%) coincided with a slight uptick in homeownership to 58%, likely due to increased affordability of mortgages.
The renter population in zip code 95618 has shown a corresponding inverse trend to homeownership. In 2013, the renter percentage was 42%, which increased to 45% by 2022. This rise in renters aligns with the increase in average rent prices. In 2013, the average rent was $1,605, which grew to $1,864 by 2022, a 16.1% increase. The population fluctuated during this period, peaking at 27,093 in 2016 before settling at 26,193 in 2022. The increasing renter population, despite rising rent prices, suggests a growing demand for rental properties in the area, possibly driven by the student population and those priced out of the housing market.
In 2023 and 2024, we see a continuation of these trends. The average home price in 2023 was $857,683, showing a slight decrease from 2022, but it rebounded to $881,078 in 2024. This rebound occurred despite high federal interest rates of 5.02% in 2023 and 5.33% in 2024, which typically would dampen housing demand. These high interest rates may lead to a cooling of the housing market in the near future.
Looking ahead, predictive models suggest that average home prices in zip code 95618 may continue to rise, but at a more moderate pace due to the high interest rate environment. We can expect average home prices to potentially reach around $950,000 to $1 million in the next five years. Average rent prices are also likely to continue their upward trajectory, potentially reaching $2,200 to $2,400 per month in the same timeframe, driven by ongoing demand and the overall cost of living increases in the area.
In summary, zip code 95618 has experienced a gradual shift towards a higher percentage of renters, driven by rising home prices that have outpaced income growth. The interplay between federal interest rates, home prices, and rental rates has created a dynamic housing market. While homeownership has become more challenging, the area continues to attract residents, maintaining a competitive rental market. The coming years are likely to see continued price appreciation in both the home buying and rental markets, albeit at a potentially slower rate due to economic factors and interest rate environments.
