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Rising Home Values and Ownership Rates Transform Billings' Southside Neighborhood
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
The Southside neighborhood of Billings, Montana, has experienced significant shifts in homeownership rates and housing prices over the past decade. This area has seen a notable increase in owner-occupied housing, coupled with substantial growth in average home values. The neighborhood's demographic composition and housing market have undergone considerable changes, reflecting broader economic trends and local developments.
From 2013 to 2022, the Southside neighborhood witnessed a remarkable increase in homeownership rates. In 2013, only 35% of housing units were owner-occupied, but by 2022, this figure had risen to 58%. This substantial 23 percentage point increase in homeownership coincided with a significant rise in average home prices. In 2013, the average home price in the area was $116,124, and by 2022, it had climbed to $210,942, representing an impressive 81.6% increase over this period.
The trend in homeownership rates appears to have been influenced by federal interest rates. From 2013 to 2016, when interest rates were at historic lows (ranging from 0.11% to 0.40%), homeownership rates in the Southside neighborhood remained relatively stable around 35%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% by 2022, homeownership rates in the neighborhood also increased significantly, reaching 58% in 2022. This trend suggests that local factors, such as neighborhood improvements or changing demographics, may have played a more significant role in driving homeownership than national interest rates during this period.
Conversely, as homeownership rates increased, the percentage of renters in the Southside neighborhood decreased from 65% in 2013 to 42% in 2022. Interestingly, despite this decrease in the renter population, average rent prices showed an overall upward trend. In 2013, the average rent was $602, which increased to $830 by 2022, representing a 37.9% increase. This rise in rent prices, despite a decreasing renter population, could indicate a growing demand for rental properties in the area or an overall increase in the cost of living.
Looking at the most recent data from 2023 and 2024, we see that the upward trend in average home prices has continued. In 2023, the average home price in the Southside neighborhood reached $230,335, and in 2024, it further increased to $237,222. This represents a 12.5% increase from 2022 to 2024. Notably, federal interest rates also saw a significant jump, rising from 1.68% in 2022 to 5.02% in 2023, and further to 5.33% in 2024. Despite these higher interest rates, home prices have continued to appreciate, suggesting strong underlying demand in the local housing market.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in the Southside neighborhood will continue to rise, albeit potentially at a more moderate pace due to the higher interest rate environment. We project that by 2029, average home prices could reach approximately $275,000 to $290,000, representing a 15-22% increase from 2024 levels. For rent prices, we expect a continued upward trend, with average rents potentially reaching $950 to $1,000 by 2029, an increase of 14-20% from 2022 levels.
In summary, the Southside neighborhood of Billings has experienced a significant shift towards homeownership, with substantial increases in both homeownership rates and average home prices. Despite a decreasing renter population, rent prices have also trended upwards. The continuation of rising home prices in 2023 and 2024, even in the face of higher interest rates, indicates robust demand in the local housing market. These trends suggest a transforming neighborhood with increasing property values and changing demographics, pointing to potential opportunities and challenges for both residents and investors in the coming years.
