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Decatur, Alabama: 'The River City' Sees Rising Home Values and Stable Ownership
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
Decatur, Alabama, known as "The River City," is a vibrant community situated along the Tennessee River. This city has experienced notable shifts in homeownership rates and housing costs over the past decade. From 2013 to 2022, Decatur saw a gradual increase in homeownership, while average home prices and average rent costs displayed an upward trajectory.
The homeownership rate in Decatur has shown a steady increase from 62% in 2013 to 65% in 2022. This rise in homeownership coincided with a significant increase in average home prices. In 2013, the average home price in Decatur was $119,357, which rose to $201,320 by 2022, representing a 68.7% increase over nine years. This trend suggests that despite rising home prices, Decatur residents have maintained a strong inclination towards homeownership.
Federal interest rates have played a crucial role in shaping homeownership trends in Decatur. The period from 2013 to 2016 saw historically low interest rates, hovering between 0.09% and 0.4%. This favorable financing environment likely contributed to the initial rise in homeownership from 62% to 63% during this time. As interest rates began to climb from 2017 onwards, reaching 1.68% in 2022, the homeownership rate in Decatur continued to increase, reaching 65%, indicating a robust local housing market that withstood rising borrowing costs.
The rental market in Decatur has shown interesting trends as well. The percentage of renters decreased slightly from 37% in 2013 to 35% in 2022. However, average rent prices increased from $697 in 2013 to $811 in 2022, a 16.4% rise. This increase in rent prices, coupled with a slight decrease in the renter population, suggests a tightening rental market, possibly driven by the growing population, which increased from 64,389 in 2013 to 67,175 in 2022.
In 2023 and 2024, Decatur's housing market continued to evolve. The average home price reached $208,546 in 2023 and further increased to $211,917 in 2024, showing a continued upward trend. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially impacting homebuying decisions and affordability.
Looking ahead, predictive models suggest that Decatur's housing market will continue to grow, albeit at a more moderate pace. Average home prices are projected to increase by approximately 3-4% annually over the next five years, potentially reaching around $245,000 by 2029. Average rent prices are expected to follow a similar trend, with an estimated annual increase of 2-3%, potentially reaching about $930 per month by 2029.
In summary, Decatur has demonstrated a resilient housing market characterized by increasing homeownership rates and rising property values. The city has maintained a strong preference for homeownership despite rising home prices and fluctuating interest rates. The rental market, while slightly shrinking in terms of percentage, has seen steady increases in average rent prices. These trends, combined with the city's population growth, paint a picture of a dynamic and evolving real estate landscape in Decatur, Alabama.
