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Folsom, California: Rising Home Values and Stable Ownership in a Lake-Side 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
Folsom, California, a vibrant city located in Sacramento County, has experienced significant growth and development over the past decade. Known for its scenic beauty and proximity to Folsom Lake, this city has seen notable trends in homeownership, average home prices, and rental markets. From 2013 to 2022, Folsom's homeownership rate has remained relatively stable, fluctuating between 67% and 71%, while average home prices have shown a substantial increase. Concurrently, average rent prices have also risen, reflecting the city's growing desirability and economic dynamics.
The relationship between homeownership rates and average home prices in Folsom presents an interesting trend. In 2013, when the homeownership rate was 67%, the average home price was $395,306. By 2022, despite a slight increase in homeownership to 69%, average home prices had skyrocketed to $803,516, representing a remarkable 103% increase over nine years. This trend suggests that rising home values have not significantly deterred homeownership in Folsom, possibly indicating strong local economic conditions and a desire for property investment among residents.
Federal interest rates have played a role in shaping homeownership trends in Folsom. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.11% to 0.40%, coinciding with an increase in homeownership from 67% to 71%. This aligns with the general trend of lower interest rates encouraging homeownership due to more affordable financing options. However, as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates in Folsom remained relatively stable, suggesting other factors such as local economic strength may have counterbalanced the impact of rising interest rates.
Renter percentages and average rent prices in Folsom have shown an inverse relationship. In 2013, when 33% of residents were renters, the average rent was $1,414. By 2022, the percentage of renters had decreased slightly to 31%, while average rent had increased significantly to $2,232, a 58% rise. This trend indicates that despite rising rents, Folsom has maintained a relatively stable renter population, possibly due to the city's growing appeal and economic opportunities attracting new residents willing to pay higher rents.
Looking at the most recent data, average home prices in Folsom reached $760,926 in 2023 and further increased to $771,489 in 2024. This represents a slight moderation in the rapid price growth seen in previous years. Concurrently, federal interest rates have risen significantly, reaching 5.02% in 2023 and 5.33% in 2024, which may impact future homebuying decisions in the city.
Applying predictive models to forecast 5-year trends, it's anticipated that average home prices in Folsom will continue to rise, albeit at a more moderate pace. The average home price could potentially reach around $850,000 to $900,000 by 2029. Average rent prices are also expected to increase, potentially reaching $2,600 to $2,800 per month within the same timeframe. These projections assume continued economic growth and sustained demand for housing in the Folsom area.
In summary, Folsom has demonstrated resilience in its housing market, maintaining stable homeownership rates despite significant increases in both home prices and rents. The city's ability to sustain these trends suggests a robust local economy and continued attractiveness to both homeowners and renters. The recent moderation in home price growth, coupled with rising interest rates, may signal a shift towards a more balanced market in the coming years. However, the overall trajectory points towards continued, albeit more measured, growth in Folsom's housing market.
