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Smithboro Housing Trends: Average Home Values Rise as Ownership Declines
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
Smithboro, located in Illinois, is a small community that has experienced significant demographic and housing market changes over the past decade. The village has seen fluctuations in homeownership rates and notable shifts in average home and rent prices, reflecting broader economic trends and local market dynamics. Homeownership in Smithboro has shown a declining trend in recent years. In 2013, the homeownership rate stood at 82%, but by 2022, it had decreased to 68%. This 14 percentage point drop indicates a significant shift in the local housing market. Interestingly, this decline in homeownership coincided with an increase in average home prices. The average home price in 2021 was $149,967, rising to $156,729 in 2022, representing a 4.5% increase in just one year.
The relationship between federal interest rates and homeownership rates in Smithboro appears to follow the general economic principle that lower interest rates tend to encourage homeownership. For instance, when interest rates were at historic lows of 0.08% in 2021, the homeownership rate was still relatively high at 74%. However, as interest rates began to rise sharply in 2022 to 1.68%, we saw a corresponding decrease in homeownership to 68%. This trend suggests that rising interest rates may have made home financing less affordable for some residents, potentially contributing to the decline in homeownership.
The rental market in Smithboro has shown interesting trends as well. The percentage of renters increased from 17% in 2013 to 32% in 2022, a 15 percentage point increase. However, the average rent prices have shown significant volatility. In 2013, the average rent was $2,031, which increased to $2,103 in 2016. Surprisingly, there was a sharp decline in average rent prices in recent years, dropping to $357 in 2022. This substantial decrease in rent prices, coupled with the increasing renter population, suggests complex local market factors at play, possibly including changes in housing stock or economic conditions affecting the village.
Looking at the most recent data from 2023 and 2024, we see that average home prices in Smithboro have stabilized somewhat. In 2023, the average home price was $153,790, and in 2024, it slightly increased to $154,287. This represents a modest 0.32% increase year-over-year. Interestingly, this stability in home prices comes at a time when federal interest rates have risen significantly, reaching 5.02% in 2023 and 5.33% in 2024. These higher interest rates could potentially impact future home buying activity in the village.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in Smithboro may continue to see modest growth, potentially reaching around $160,000 by 2029. This forecast takes into account the recent stability in prices and the current high-interest rate environment. For rent prices, given the recent volatility, it's challenging to make a precise prediction. However, if the trend of increasing renter population continues, we might see a gradual increase in average rent prices, possibly stabilizing around $500-$600 per month by 2029, assuming no major economic disruptions.
In summary, Smithboro has experienced a significant shift from homeownership to renting over the past decade, with homeownership rates declining and renter populations increasing. Despite this shift, average home prices have shown resilience and even growth in recent years. The rental market has seen more volatility, with a surprising decrease in average rent prices despite the increasing renter population. As interest rates remain high, it will be crucial to monitor how these factors continue to shape the housing market in Smithboro in the coming years.
