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Berkeley's 94702 Zip Code: A Decade of Rising Home Values and Shifting Ownership Trends
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
DATA SOURCE
United States Census Bureau: American Community Survey Data (ACS)
Zillow: Zillow Home Value Index (ZHVI)
Berkeley's 94702 zip code, located in the heart of the East Bay, offers a diverse urban landscape with a mix of residential and commercial areas. This vibrant community has experienced significant changes in homeownership rates and housing costs over the past decade. From 2013 to 2022, the area saw a slight increase in homeownership, while average home prices and average rent prices both rose substantially.
The homeownership rate in zip code 94702 increased modestly from 45% in 2013 to 47% in 2022. During this same period, average home prices surged from $560,425 to $1,320,197, representing a remarkable 135.6% increase. This trend suggests that despite the sharp rise in housing costs, there was still a slight uptick in homeownership. The most significant jump in average home prices occurred between 2014 and 2015, with a 19.9% increase from $652,232 to $782,036.
Federal interest rates played a role in homeownership trends. From 2013 to 2016, interest rates remained below 0.5%, coinciding with a period of steady homeownership rates around 45-46%. As interest rates began to rise in 2017, reaching 1.83% by 2018, homeownership rates stabilized at 46%. Interestingly, when interest rates dropped significantly in 2020 and 2021 (0.38% and 0.08% respectively), homeownership rates increased to 48%, supporting the notion that lower interest rates can encourage homeownership.
Renter percentages in the 94702 zip code decreased slightly from 55% in 2013 to 53% in 2022. During this period, average rent prices increased from $1,190 to $1,774, a 49.1% rise. The most substantial jump in average rent occurred between 2015 and 2016, increasing from $1,256 to $1,410, a 12.3% rise. The population in the zip code grew from 16,105 in 2013 to 16,993 in 2022, potentially contributing to the upward pressure on rent prices despite the slight decrease in the percentage of renters.
In 2023 and 2024, the housing market in zip code 94702 experienced a correction. Average home prices decreased from $1,320,197 in 2022 to $1,193,976 in 2023, and further to $1,177,980 in 2024, representing a total decline of 10.8% over two years. This downturn coincided with a significant increase in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024, potentially cooling the housing market.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 94702 may experience modest growth, potentially reaching around $1,300,000 by 2029. Average rent prices are expected to continue their upward trajectory, potentially surpassing $2,000 per month within the next five years, driven by the area's continued desirability and limited housing supply.
The 94702 zip code in Berkeley has demonstrated resilience in its housing market, with a slight increase in homeownership despite rapidly rising home prices. The relationship between federal interest rates and homeownership rates has been evident, with lower rates generally corresponding to higher ownership levels. Rent prices have shown steady growth, albeit at a slower pace than home prices. The recent correction in home prices, coupled with rising interest rates, suggests a potential stabilization of the market. Looking forward, moderate growth in both home prices and rents is anticipated, reflecting the enduring appeal of this Berkeley neighborhood.
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