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Parkwood, Springfield: Rising Home Values and Shifting Ownership in a Transforming 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
Parkwood, a neighborhood in Springfield, Missouri, has experienced significant changes in its housing market over the past decade. This area has seen a notable shift in the balance between homeownership and renting, accompanied by substantial fluctuations in average home prices and rent costs.
The percentage of owner-occupied homes in Parkwood has steadily declined from 47% in 2013 to 37% in 2022. This trend coincides with a remarkable increase in average home prices, which rose from $72,072 in 2013 to $161,500 in 2022, representing a 124% increase over nine years. The inverse relationship between homeownership rates and average home prices suggests that rising property values may be pricing some potential buyers out of the market.
Federal interest rates have played a significant role in shaping homeownership trends in Parkwood. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.11% to 0.4%. During this time, homeownership rates remained relatively stable, fluctuating between 43% and 47%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, homeownership rates declined more sharply, dropping from 42% in 2017 to 37% in 2022. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
As homeownership declined, the percentage of renters in Parkwood increased from 53% in 2013 to 63% in 2022. This shift coincided with a steady rise in average rent prices, which increased from $749 in 2013 to $850 in 2022, a 13.5% increase. The population of Parkwood also grew during this period, from 3,642 in 2013 to 4,370 in 2022, potentially contributing to increased demand for rental properties and supporting the upward trend in rent prices.
In 2023 and 2024, the housing market in Parkwood continued to evolve. The average home price in 2023 reached $171,167, a 6% increase from 2022. By 2024, it further rose to $177,314, marking a 3.6% increase from the previous year. Concurrently, federal interest rates climbed to 5.02% in 2023 and 5.33% in 2024, reaching levels not seen since before the 2008 financial crisis. These high interest rates could potentially impact homeownership rates and market dynamics in the coming years.
Looking ahead, predictive models suggest that average home prices in Parkwood may continue to rise over the next five years, albeit at a potentially slower rate due to the high interest rate environment. Average rent prices are also expected to increase, driven by the growing population and the trend towards renting. However, the rate of increase may moderate as the market adjusts to economic conditions and housing supply catches up with demand.
In summary, Parkwood has witnessed a significant shift towards renting, with homeownership rates declining as average home prices surged. The neighborhood has experienced substantial population growth, contributing to increased housing demand and rising rent prices. High interest rates in recent years may continue to influence the housing market, potentially slowing home price appreciation but maintaining upward pressure on rent costs. These trends reflect a dynamic housing market that has become increasingly challenging for potential homeowners while offering opportunities for real estate investors and developers.
