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Reform, Alabama: Rising Home Values Amid Declining Ownership in a Small 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
Reform, Alabama, a small city with a population of 3,256 in 2022, has experienced notable shifts in its housing market over the past decade. The city, spanning 8.01 square miles, has seen fluctuations in homeownership rates and housing prices, reflecting broader economic trends and local dynamics.
Homeownership in Reform has shown a gradual decline from 2013 to 2022, with some fluctuations. In 2013, the homeownership rate stood at 73%, decreasing to 67% by 2022. This trend coincides with changes in average home prices, which have generally increased over the same period. In 2013, the average home price was $84,731, rising to $119,893 by 2022, representing a 41.5% increase over nine years.
The relationship between federal interest rates and homeownership rates in Reform shows some correlation. As interest rates remained low from 2013 to 2016 (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable, hovering around 71-73%. However, as interest rates began to rise more significantly from 2017 onwards, reaching 1.68% in 2022, homeownership rates showed a general downward trend, dropping to 67% by 2022.
Conversely, the percentage of renters in Reform has increased from 27% in 2013 to 33% in 2022. This rise in renters coincides with an increase in average rent prices. In 2013, the average rent was $289, which rose to $360 by 2022, marking a 24.6% increase. It's worth noting that despite the overall upward trend, there were some fluctuations in rent prices, with a peak of $538 in 2021 before dropping in 2022.
Looking at the most recent data, the average home price in Reform reached $123,533 in 2023, showing continued growth from previous years. However, in 2024, there was a notable decrease to $114,213, representing a 7.5% drop. This decline coincides with a significant increase in federal interest rates, which rose to 5.02% in 2023 and further to 5.33% in 2024, potentially impacting home affordability and buyer demand.
Applying predictive models to forecast 5-year trends, it's anticipated that average home prices in Reform may experience moderate growth, albeit at a slower pace than seen in recent years due to higher interest rates. Average rent prices are expected to continue their upward trajectory, driven by increased demand for rental properties as homeownership becomes less accessible for some residents.
In summary, Reform has witnessed a gradual shift towards renting, with homeownership rates declining and rent prices increasing over the past decade. The city's housing market has shown resilience with overall growth in home values, but recent interest rate hikes and the 2024 price drop suggest a potential cooling of the market. These trends reflect the complex interplay between economic factors, housing affordability, and changing demographics in this small Alabama city.
