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Rising Home Values and Ownership: Alexander City's Decade of Growth
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
Alexander City, Alabama, is a charming Southern city located in Tallapoosa County. Known for its picturesque Lake Martin, the city has experienced fluctuations in homeownership rates and housing prices over the past decade. From 2013 to 2022, the city saw a significant increase in homeownership, while average home prices and average rent prices showed overall upward trends.
The homeownership rate in Alexander City increased substantially from 59% in 2013 to 67% in 2022. This rise coincided with an overall increase in average home prices, which grew from $101,303 in 2013 to $172,585 in 2022, representing a 70.4% increase over the period. The most dramatic rise in home prices occurred between 2020 and 2022, with a 31.2% increase from $131,580 to $172,585. This rapid appreciation in home values likely contributed to the growing attraction of homeownership as a potential investment.
Federal interest rates played a significant role in shaping homeownership trends in Alexander City. The period from 2013 to 2020 was characterized by historically low interest rates, ranging from 0.09% to 2.16%. These low rates likely contributed to the steady increase in homeownership, as they made mortgages more affordable for potential buyers. The sharp increase in homeownership from 61% in 2017 to 67% in 2019 coincided with interest rates rising from 1% to 2.16%, suggesting that buyers may have been motivated to enter the market before rates increased further.
As homeownership rates increased, the percentage of renters in Alexander City decreased from 40% in 2013 to 33% in 2022. Interestingly, average rent prices showed an overall upward trend during this period, rising from $587 in 2013 to $579 in 2022, with some fluctuations in between. The highest average rent was recorded in 2021 at $669. The city's population remained relatively stable during this time, decreasing slightly from 17,077 in 2013 to 16,692 in 2022, which may have contributed to the moderate changes in rental demand and pricing.
In 2023, the average home price in Alexander City reached $176,947, the highest point in the dataset, while federal interest rates climbed to 5.02%. As of 2024, the average home price has slightly decreased to $172,362, with interest rates further rising to 5.33%. This recent trend suggests a potential cooling in the housing market, possibly due to the higher borrowing costs associated with increased interest rates.
Looking ahead, predictive models suggest that average home prices in Alexander City may continue to experience moderate growth over the next five years, albeit at a slower pace than the rapid appreciation seen in recent years. The high interest rate environment could temper price increases, potentially leading to a more balanced market. Average rent prices are expected to follow a similar pattern of modest growth, influenced by factors such as local economic conditions and housing supply.
In summary, Alexander City has witnessed a significant shift towards homeownership over the past decade, accompanied by substantial increases in average home prices. The interplay between federal interest rates, homeownership rates, and housing prices has been evident, with low interest rates generally supporting the trend towards increased homeownership. As the city moves forward, the housing market may enter a period of more moderate growth, influenced by higher interest rates and evolving economic conditions.
