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Colonial Village: Soaring Home Values and Shifting Ownership Patterns
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Colonial Village, a neighborhood in Sacramento, California, has experienced significant changes in its housing market over the past decade. The area is known for its close-knit community and diverse housing options, reflecting broader economic trends and local market dynamics. Since 2013, homeownership rates have fluctuated notably, while property values have shown a consistent upward trajectory. The homeownership rate in Colonial Village has varied considerably since 2013. It began at 62% in 2013, peaked at 67% in 2019, and then declined to 59% in 2022. This trend correlates with the substantial increase in average home prices. In 2013, the average home price was $117,868, and by 2022, it had more than tripled to $398,149. The sharp rise in home values, particularly from $293,976 in 2020 to $398,149 in 2022, may have contributed to the recent decline in homeownership rates as affordability became a growing concern for potential buyers.
The relationship between federal interest rates and homeownership rates in Colonial Village generally follows an inverse pattern. When interest rates were at historic lows of 0.08% in 2021, homeownership stood at 58%. As interest rates began to rise, reaching 1.68% in 2022, homeownership slightly increased to 59%, possibly due to buyers rushing to secure mortgages before rates climbed further. This trend aligns with the general principle that lower interest rates tend to encourage homeownership by making mortgages more affordable.
Renter percentages in Colonial Village have fluctuated in opposition to homeownership rates, ranging from a low of 33% in 2019 to a high of 42% in 2021. Average rent prices have shown an overall upward trend, increasing from $1,161 in 2013 to $1,266 in 2022. Notably, there was a significant spike in average rent to $1,448 in 2021, coinciding with the highest percentage of renters (42%) during the observed period. This spike may have been influenced by the neighborhood's population growth from 3,321 in 2020 to 3,275 in 2021, potentially increasing demand for rental properties.
In 2023 and 2024, the housing market of Colonial Village experienced interesting developments. The average home price slightly decreased to $383,305 in 2023, before rebounding to $394,809 in 2024. This minor correction and subsequent recovery occurred against the backdrop of significantly higher interest rates, which rose to 5.02% in 2023 and further to 5.33% in 2024. These higher rates may have temporarily cooled the market, leading to the brief dip in prices before renewed demand drove them up again.
Looking ahead, predictive models suggest a continued but moderate increase in both average home prices and rent over the next five years. Home prices are expected to grow at an annual rate of about 3-4%, potentially reaching around $460,000 by 2029. Rent prices are projected to increase at a similar pace, potentially reaching an average of $1,450-$1,500 per month in the same timeframe.
In summary, Colonial Village has experienced significant growth in property values over the past decade, with some recent moderation due to rising interest rates. The interplay between homeownership rates, rental percentages, and property values reflects the neighborhood's dynamic real estate market. As interest rates stabilize at higher levels, we can expect a more balanced market with steady, moderate growth in both home prices and rents in the coming years.
