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Kingsessing's Housing Market: Soaring Home Values Amidst Declining Ownership
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Kingsessing, a neighborhood in Philadelphia, Pennsylvania, has experienced significant shifts in its housing market over the past decade. This analysis explores the trends in homeownership rates, average home prices, and average rent prices, revealing a dynamic real estate landscape.
From 2013 to 2022, Kingsessing saw a notable decline in homeownership rates, dropping from 60% to 51%. Simultaneously, average home prices experienced a substantial increase. In 2013, the average home price was $41,781, which rose dramatically to $136,602 by 2022, representing a 227% increase over nine years. This inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less accessible for some residents.
Federal interest rates play a crucial role in homeownership trends. From 2013 to 2016, interest rates remained low, hovering around 0.1% to 0.4%. During this period, homeownership rates in Kingsessing remained relatively stable, ranging from 55% to 60%. However, as interest rates began to climb from 2017 onwards, reaching 1.68% in 2022, homeownership rates declined to 51%. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging home purchases.
As homeownership declined, the percentage of renters in Kingsessing increased from 40% in 2013 to 49% in 2022. Interestingly, average rent prices fluctuated during this period. In 2013, the average rent was $991, which decreased to $829 in 2019 before rising again to $1,149 in 2022. This represents a 16% increase in average rent from 2013 to 2022, despite some intervening decreases. The population of Kingsessing also fluctuated during this time, from 21,197 in 2013 to 20,474 in 2022, which may have influenced rental demand and prices.
Looking at the most recent data, 2023 saw a significant decrease in average home prices in Kingsessing, dropping to $117,767 from the previous year's $136,602. This trend continued into 2024, with average home prices further declining to $111,633. Concurrently, federal interest rates rose sharply to 5.02% in 2023 and 5.33% in 2024, reaching levels not seen since the early 2000s. These higher interest rates likely contributed to the cooling of home prices by making mortgages more expensive and reducing buyer demand.
Applying predictive models to forecast the next five years, we anticipate that average home prices in Kingsessing may continue to experience some downward pressure in the short term due to the current high interest rate environment. However, as the market adjusts, prices could stabilize and potentially begin a gradual upward trend, especially if interest rates decrease. For average rent prices, we expect a continued upward trajectory, albeit at a more moderate pace than seen in recent years, as the rental market often benefits from decreased homeownership rates.
In summary, Kingsessing has witnessed a clear shift towards a more renter-dominated market over the past decade, accompanied by significant increases in both average home prices and rent prices. The recent cooling of the housing market, influenced by rising interest rates, marks a potential turning point in these trends. As the neighborhood continues to evolve, these housing market dynamics will play a crucial role in shaping its future demographic and economic landscape.
