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Berlin, NH: Rising Home Values Amidst Declining Ownership in Paper Mill City
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
Berlin, New Hampshire, a small city nestled in the White Mountains, is known for its rich history in the paper industry. Over the past decade, Berlin has experienced fluctuations in homeownership rates and housing prices, with a general trend towards increasing average home values and a slight decrease in owner-occupied housing.
The homeownership rate in Berlin has shown a gradual decline from 2013 to 2019, dropping from 63% to 56%. However, there was a slight recovery in 2020 and 2021, with the rate increasing to 63% by 2021. This trend coincides with changes in average home prices, which have seen significant growth, particularly in recent years. In 2013, the average home price was $70,192, and by 2022, it had more than doubled to $155,120, representing a 121% increase over nine years.
Federal interest rates have played a role in homeownership trends in Berlin. From 2013 to 2016, when interest rates were exceptionally low (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable, hovering around 60-63%. As interest rates began to rise from 2017 onwards, reaching 2.16% by 2019, homeownership rates declined to 56%. However, the sharp drop in interest rates in 2020 and 2021 (0.38% and 0.08% respectively) coincided with a rebound in homeownership to 63%.
Renter percentages in Berlin have generally mirrored the inverse of homeownership rates. The proportion of renters increased from 37% in 2013 to 44% in 2019, before declining slightly to 37% in 2021. Average rent prices have fluctuated over this period, with some correlation to renter percentages. In 2013, the average rent was $737, rising to $790 in 2015 when the renter percentage was 40%. Rent prices then decreased to $716 in 2018 as the renter percentage increased to 43%, possibly indicating an oversupply of rental units. By 2022, the average rent had decreased slightly to $704, with renters comprising 41% of the population.
In 2023, the average home price in Berlin continued its upward trajectory, reaching $169,334. This trend persisted into 2024, with the average home price climbing to $180,681. Notably, interest rates also saw a significant increase, rising to 5.02% in 2023 and further to 5.33% in 2024. These higher interest rates may potentially impact homeownership rates and housing affordability in the coming years.
Looking ahead, based on the historical data and current trends, we can project that average home prices in Berlin are likely to continue rising over the next five years, albeit potentially at a slower rate due to higher interest rates. A conservative estimate would place average home prices around $220,000 to $240,000 by 2029. Average rent prices, which have shown more volatility, may stabilize or see modest increases, potentially reaching $750 to $800 per month in the same timeframe.
In summary, Berlin has experienced a significant increase in average home values over the past decade, with some fluctuations in homeownership rates. The relationship between federal interest rates and homeownership has been evident, with lower rates generally supporting higher ownership levels. Renter percentages and rent prices have shown inverse relationships at times, reflecting the dynamic nature of the local housing market. The recent sharp increases in both home prices and interest rates suggest a changing landscape for Berlin's housing market, which may impact affordability and homeownership trends in the coming years.
