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Cumberland Gardens: Rising Home Values and Shifting Ownership in Allentown's Dynamic Neighborhood
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
Cumberland Gardens, a neighborhood in Allentown, Pennsylvania, has experienced significant changes in its housing market over the past decade. This area has seen notable fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market conditions.
The neighborhood has witnessed a substantial decrease in homeownership rates, dropping from 84% in 2017 to 58% in 2022. This decline coincided with a significant increase in average home prices. In 2017, the average home price in Cumberland Gardens was $151,521, but by 2022, it had risen dramatically to $254,157, representing a 67.7% increase over five years. This inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less attainable for some residents.
Federal interest rates have played a crucial role in shaping homeownership trends in Cumberland Gardens. In 2017, when homeownership was at 84% and interest rates were at 1%, the housing market was more accessible to potential buyers. However, as interest rates rose to 1.68% in 2022, coinciding with the drop in homeownership to 58%, it became more challenging for residents to secure affordable mortgages. This trend aligns with the general economic principle that lower interest rates tend to encourage homeownership by making financing more affordable.
As homeownership decreased, the percentage of renters in Cumberland Gardens increased from 16% in 2017 to 42% in 2022. Despite this significant increase in the renter population, average rent prices experienced a downward trend. In 2017, the average rent was $1,478, but by 2022, it had decreased to $1,214, a 17.9% reduction. This counterintuitive trend might be attributed to factors such as increased housing supply or local economic conditions affecting rental market dynamics.
The years 2023 and 2024 have seen continued growth in average home prices in Cumberland Gardens. In 2023, the average home price reached $268,839, and in 2024, it further increased to $280,910. This represents a 10.5% increase from 2022 to 2024. Concurrently, federal interest rates have risen significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates may continue to impact homeownership rates and affordability in the neighborhood.
Looking ahead, predictive models suggest that average home prices in Cumberland Gardens are likely to continue their upward trajectory over the next five years, albeit at a potentially slower rate due to higher interest rates. Average rent prices, which have shown volatility in recent years, may stabilize or see moderate increases as the rental market adjusts to changing demand and economic conditions.
In summary, Cumberland Gardens has experienced a significant shift from a predominantly homeowner community to one with a more balanced mix of owners and renters. The inverse relationship between rising home prices and declining homeownership rates, coupled with the influence of federal interest rates, has reshaped the neighborhood's housing landscape. As average home prices continue to climb and interest rates remain high, the community may see further changes in its residential composition and housing affordability dynamics in the coming years.
