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Rising Home Values and Shifting Ownership in Somers Point, NJ: A Decade of Coastal Real Estate Trends
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
Somers Point, New Jersey, is a charming coastal city located in Atlantic County. With a population of 10,482 in 2022 and a land area of 4.02 square miles, this small community offers a blend of suburban living and waterfront charm. The city has experienced fluctuations in homeownership rates and housing prices over the years, reflecting broader economic trends and local market dynamics. The homeownership rate in Somers Point has shown a gradual decline from 2013 to 2022. In 2013, 57% of residents owned their homes, but by 2022, this figure had decreased to 53%. This downward trend coincides with a significant increase in average home prices. In 2013, the average home price was $187,706, which rose to $318,060 by 2022, representing a 69.4% increase over nine years. This substantial appreciation in home values may have contributed to the decline in homeownership, as higher prices potentially priced out some prospective buyers.
Federal interest rates play a crucial role in homeownership trends. From 2013 to 2016, interest rates remained extremely low, ranging from 0.11% to 0.4%. During this period, homeownership rates in Somers Point remained relatively stable, fluctuating between 55% and 57%. However, as interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), we observe a slight increase in homeownership to 58% in 2018 and 2019. This could be attributed to buyers rushing to purchase homes before rates increased further. The sharp drop in interest rates in 2020 (0.38%) and 2021 (0.08%) coincided with a decrease in homeownership to 55% and 52% respectively, possibly due to economic uncertainty during the COVID-19 pandemic.
Renter percentages in Somers Point have generally increased as homeownership rates declined. In 2013, 42% of residents were renters, which increased to 47% by 2022. Average rent prices have shown an overall upward trend, rising from $1,094 in 2013 to $1,107 in 2022, with some fluctuations in between. The highest average rent was recorded in 2021 at $1,177. The increase in renter percentages and rent prices could be attributed to the rising home prices making homeownership less attainable for some residents.
In 2023, the average home price in Somers Point reached $353,000, a significant jump from the previous year. This trend continued into 2024, with average home prices rising further to $380,831. Concurrently, federal interest rates increased to 5.02% in 2023 and 5.33% in 2024, reaching levels not seen since before the 2008 financial crisis. These higher interest rates, combined with elevated home prices, may present challenges for potential homebuyers in the near future.
Looking ahead, our predictive models suggest that average home prices in Somers Point may continue to rise over the next five years, albeit at a potentially slower pace due to the higher interest rate environment. We anticipate average home prices could reach approximately $425,000 to $450,000 by 2029. Average rent prices are also expected to increase, potentially reaching $1,300 to $1,400 per month in the same timeframe, driven by continued demand for rental properties as homeownership becomes more challenging for some residents.
In summary, Somers Point has experienced a gradual shift towards a higher percentage of renters over the past decade, coinciding with substantial increases in average home prices. The interplay between federal interest rates, housing affordability, and economic conditions has significantly influenced these trends. As the city moves forward, the balance between homeownership and renting will likely continue to evolve, shaped by broader economic factors and local market dynamics.
