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Raintree, Tempe: Rising Home Values and Shifting Ownership Patterns
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
Raintree, a neighborhood in Tempe, Arizona, has experienced significant changes in homeownership and property values over the past decade. This area has maintained a high percentage of owner-occupied homes, although there has been a slight decrease in recent years. Simultaneously, average home prices have shown a strong upward trend, especially since 2020.
Homeownership rates in Raintree have remained consistently high, reaching a peak of 99% in 2013. However, there has been a gradual decline, with the rate dropping to 92% by 2022. Despite this decrease, the neighborhood still maintains a strong owner-occupied majority. During this same period, average home prices have shown substantial growth. In 2010, the average home price was $470,700, which increased to $991,961 by 2022, representing a 110.7% increase over 12 years.
The relationship between federal interest rates and homeownership rates in Raintree appears to follow general economic principles. When interest rates were at historic lows between 2010 and 2016, ranging from 0.1% to 0.4%, homeownership rates remained high, above 95%. As interest rates began to rise from 2017 onwards, there was a slight decline in homeownership rates, dropping to 92% by 2022 when the federal interest rate reached 1.68%.
The renter population in Raintree has grown modestly over the years, from 1% in 2013 to 7% in 2022. This increase in renters has been accompanied by a rise in average rent prices. In 2013, the average rent was $1,681, which increased to $1,744 by 2022, a 3.7% increase over nine years. The slower growth in rent prices compared to home prices suggests that renting has become relatively more affordable in the neighborhood, potentially explaining the slight increase in the renter population.
In 2023, the average home price in Raintree experienced a slight decrease to $964,499, down 2.8% from the previous year. This coincided with a significant increase in the federal interest rate to 5.02%. Moving into 2024, the average home price has rebounded to $1,004,233, showing a 4.1% increase from 2023. The federal interest rate has further increased to 5.33% in 2024, reaching its highest level since 2007.
Looking ahead, based on historical trends and current market conditions, average home prices in Raintree are expected to continue their upward trajectory, albeit at a potentially slower rate due to higher interest rates. A five-year forecast suggests average home prices could reach approximately $1,200,000 by 2029. Average rent prices are also likely to increase, potentially reaching around $1,900 per month in the same timeframe, assuming current trends persist.
In summary, Raintree has maintained a strong homeowner-majority status despite recent increases in the renter population. The neighborhood has experienced significant appreciation in home values, particularly since 2020, outpacing the growth in rent prices. The impact of rising interest rates on homeownership rates and property values will be a key factor to watch in the coming years, potentially influencing the balance between owners and renters in this desirable Tempe neighborhood.
