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Rising Home Values and Ownership Dynamics in Chicago's Resilient Arcadia Terrace
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
Arcadia Terrace, a neighborhood in Chicago, Illinois, has experienced significant changes in its housing market over the past decade. This area has seen fluctuations in homeownership rates, average home prices, and average rent prices, reflecting broader economic trends and local market dynamics. The ownership percentage in Arcadia Terrace has shown a general upward trend, increasing from 37% in 2013 to 45% in 2022. This rise in homeownership coincided with a substantial increase in average home prices. In 2013, the average home price was $182,205, which rose dramatically to $324,457 by 2022, representing a 78% increase over nine years. This trend suggests a growing demand for homeownership in the area, possibly driven by the neighborhood's attractiveness and overall market conditions. The relationship between federal interest rates and homeownership rates in Arcadia Terrace aligns with well-established trends. As interest rates remained low from 2013 to 2016, hovering around 0.1% to 0.4%, homeownership rates saw modest growth. The slight increase in interest rates to 1% in 2017 and 1.83% in 2018 coincided with a continued rise in homeownership, possibly due to anticipation of future rate hikes encouraging buyers to enter the market.
Renter percentages in Arcadia Terrace have generally decreased as homeownership increased, dropping from 63% in 2013 to 55% in 2022. Despite this decline, average rent prices have shown an upward trend. In 2013, the average rent was $1,015, which increased to $1,274 by 2022, a 25.5% rise over nine years. This increase in rent prices, despite a decreasing renter population, might indicate a tightening rental market or an overall increase in the neighborhood's desirability.
Looking at more recent data, the average home price in Arcadia Terrace continued to rise, reaching $332,473 in 2023 and $354,693 in 2024. This represents a 9.3% increase from 2022 to 2024, indicating a robust housing market despite higher interest rates of 5.02% in 2023 and 5.33% in 2024. These higher rates haven't significantly dampened home price growth, suggesting strong underlying demand in the neighborhood.
Applying predictive models to forecast 5-year trends, we anticipate continued growth in both average home and rent prices. Home prices are projected to increase by approximately 20-25% over the next five years, potentially reaching around $425,000 by 2029. Rent prices are expected to rise more moderately, possibly by 10-15%, which could bring the average rent to approximately $1,450-$1,500 by 2029.
In summary, Arcadia Terrace has demonstrated a robust housing market with increasing homeownership rates and rising property values. The neighborhood has shown resilience in the face of changing interest rates, with home prices continuing to appreciate even as rates have increased. The rental market, while shrinking in terms of percentage, has seen steady price increases, indicating sustained demand. These trends suggest Arcadia Terrace remains an attractive area for both homeowners and renters, with potential for continued growth in property values and rental rates in the coming years.
