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Rising Home Values and Ownership in Newark, Illinois: A Decade of Real Estate 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
Newark, Illinois, is a small community that has experienced notable shifts in homeownership rates and housing prices over the past decade. The city has seen a general trend towards increased homeownership, with average home prices rising steadily. Meanwhile, average rent prices have also shown an upward trajectory, albeit with some fluctuations.
The homeownership rate in Newark has shown a consistent upward trend, increasing from 74% in 2013 to 84% in 2022. This rise in homeownership coincides with a steady increase in average home prices. In 2013, the average home price was $222,809, and by 2022, it had risen to $343,825, representing a 54% increase over this period. The most significant annual increase occurred between 2020 and 2021, when average home prices jumped from $279,253 to $307,830, a 10.2% rise in a single year.
Federal interest rates have played a role in homeownership trends in Newark. The period from 2013 to 2022 was characterized by relatively low interest rates, ranging from 0.11% to 1.68%. These low rates likely contributed to the increasing homeownership rates by making mortgages more affordable. For instance, as interest rates remained below 0.5% from 2013 to 2016, homeownership increased from 74% to 80%.
The percentage of renters in Newark has decreased from 26% in 2013 to 16% in 2022, inversely mirroring the rise in homeownership. Despite this decline in the renter population, average rent prices have generally increased. In 2013, the average rent was $712, rising to $1,141 by 2022, a 60% increase. This upward trend in rent prices, despite a shrinking renter population, suggests a tightening rental market, possibly due to limited rental inventory as more properties transition to owner-occupied status.
In 2023 and 2024, Newark experienced further increases in average home prices. The average home price reached $362,059 in 2023 and $375,413 in 2024, representing a 5.3% and 3.7% annual increase, respectively. These increases occurred despite a significant rise in federal interest rates, which jumped to 5.02% in 2023 and 5.33% in 2024. This suggests a robust local housing market that has maintained growth even in the face of higher borrowing costs.
Looking ahead, based on the observed trends, we can forecast continued growth in both average home prices and rent prices over the next five years. Average home prices are projected to maintain a steady increase, potentially reaching around $450,000 by 2029. Average rent prices are expected to continue their upward trajectory, possibly surpassing $1,400 per month within the same timeframe. However, the rate of increase may moderate compared to the sharp rises seen in recent years.
In summary, Newark has demonstrated a strong trend towards homeownership, with a corresponding increase in average home prices. The rental market, while shrinking in terms of population, has seen significant price appreciation. These trends, coupled with the community's ability to sustain price growth even as interest rates rise, suggest a robust and desirable local real estate market with potential for continued growth in both the homeownership and rental sectors.
