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Average Home Values Soar in Zip Code 95823: Sacramento's Housing Market Resilience
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Zip code 95823, located in Sacramento, California, encompasses an 11.5 square mile urban area that has witnessed significant changes in homeownership rates and property values over the past decade. This densely populated region has experienced a noteworthy transformation in its housing market dynamics.
The homeownership rate in zip code 95823 has shown a gradual increase, rising from 43% in 2015 to 48% in 2022. This upward trend has coincided with a substantial surge in average home prices, which escalated from $199,784 in 2015 to $441,121 in 2022, marking a remarkable 120.8% increase over seven years. The parallel growth in homeownership rates and home prices suggests a rising demand for property ownership in the area, despite the escalating costs.
Federal interest rates have played a crucial role in shaping homeownership trends in zip code 95823. Between 2015 and 2020, interest rates remained relatively low, ranging from 0.13% to 0.38%, likely contributing to the gradual increase in homeownership rates during this period. As interest rates began to climb, reaching 1.68% in 2022, the homeownership rate stabilized at 48%, indicating a potential impact of higher borrowing costs on property purchases.
The renter population in zip code 95823 has experienced a slight decrease, from 57% in 2015 to 52% in 2022. During this period, average rent prices increased from $1,208 in 2015 to $1,347 in 2022, an 11.5% rise. The slower growth in rent prices compared to home prices may have influenced some renters to transition to homeownership. Additionally, the population growth from 77,165 in 2015 to 84,059 in 2022 suggests a continued demand for rental properties, despite the slight decrease in the percentage of renters.
In 2023, the average home price in zip code 95823 decreased to $422,006, a 4.3% drop from the previous year. This decline continued into 2024, with the average home price reaching $435,553, showing a slight recovery. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially impacting home affordability and buyer demand in the area.
Looking ahead, predictive models suggest that average home prices in zip code 95823 may continue to experience moderate growth over the next five years, albeit at a slower pace than seen in the 2015-2022 period. Average rent prices are expected to follow a similar trend, with gradual increases aligning with population growth and housing demand in the area.
In summary, zip code 95823 has witnessed a notable increase in homeownership rates and average home prices over the past decade, with a slight decrease in the renter population. The area has shown resilience in the face of rising interest rates, maintaining stable homeownership levels. Future trends indicate continued growth in both home prices and rent, reflecting the ongoing demand for housing in this Sacramento neighborhood.
