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Gadsden, Alabama: Home Values and Ownership Trends in a River 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
Gadsden, Alabama, a city with a population of 35,145 as of 2022, is situated along the Coosa River and boasts a rich industrial history. Over the past decade, this city has experienced significant changes in its housing market, characterized by declining homeownership rates and increasing average home prices and rents. These trends reflect broader economic shifts and changing residential preferences in the area.
From 2013 to 2022, Gadsden witnessed a gradual decrease in homeownership rates, falling from 60% to 56%. Simultaneously, average home prices showed an overall upward trend, rising from $73,212 in 2013 to $100,406 in 2022, marking a substantial 37% increase. This inverse relationship suggests that rising home prices may have made homeownership less attainable for some residents, contributing to the decline in ownership rates.
Federal interest rate fluctuations appear to have influenced homeownership trends in Gadsden. When interest rates were at historic lows between 2013 and 2016 (ranging from 0.09% to 0.40%), homeownership rates remained stable at 60%. However, as interest rates began to climb from 2017 onwards, reaching 1.68% by 2022, homeownership rates declined to 56%. This pattern aligns with the general principle that lower interest rates tend to encourage homeownership by making mortgages more affordable.
As homeownership declined, the percentage of renters in Gadsden increased from 40% in 2013 to 44% in 2022. Concurrently, average rent prices rose from $690 in 2013 to $738 in 2022, an increase of about 7%. This relatively modest rise in rent compared to the significant increase in home prices may have made renting a more attractive option for some residents, particularly as the population declined from 38,282 in 2013 to 35,145 in 2022.
In 2023 and 2024, Gadsden's housing market showed interesting developments. The average home price in 2023 was $96,024, a slight decrease from the 2022 peak. This trend continued into 2024, with average home prices further declining to $94,198. Notably, federal interest rates rose significantly during this period, reaching 5.02% in 2023 and 5.33% in 2024, which likely contributed to the cooling of home prices.
Looking ahead, predictive models suggest that Gadsden's housing market may experience moderate growth over the next five years. Average home prices are projected to increase by approximately 2-3% annually, potentially reaching around $108,000 by 2029. Rent prices are expected to follow a similar trajectory, with an estimated annual growth of 1-2%, potentially bringing the average rent to approximately $800 per month by 2029.
In summary, Gadsden has experienced a shift towards renting, with homeownership rates declining as home prices increased substantially over the past decade. The relationship between federal interest rates and homeownership rates has been evident, with higher rates correlating with lower ownership percentages. Recent data shows a slight cooling in the housing market, possibly influenced by rising interest rates. Moving forward, moderate growth in both home prices and rents is anticipated, reflecting ongoing changes in Gadsden's housing landscape.
