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South Campus Housing Market: Fluctuating Home Values and Ownership in Chico's University 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
South Campus, a neighborhood in Chico, California, adjacent to California State University, Chico, has experienced notable changes in its housing market over the past decade. The area is characterized by a consistent majority of renters, with homeownership rates remaining relatively stable between 31% and 35% from 2013 to 2022. Despite this stability in homeownership rates, average home prices have shown a significant upward trend, increasing by 105% from $199,009 in 2013 to $408,633 in 2022.
The renter population in South Campus has consistently comprised 65% to 69% of residents between 2013 and 2022. Average rent prices have fluctuated during this period, starting at $1,294 in 2013, peaking at $1,360 in 2014, and then decreasing to $1,121 in 2022. This 17.6% decrease in average rent from 2014 to 2022 occurred despite a population increase from 7,957 to 9,338 during the same period, suggesting that factors such as increased housing supply or changes in local rental market dynamics may have influenced rent prices.
Federal interest rates have played a role in shaping homeownership trends in South Campus. From 2013 to 2016, when interest rates were at historic lows (ranging from 0.09% to 0.40%), the homeownership rate slightly decreased from 35% to 31%. As interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), the homeownership rate actually increased slightly to 35%, possibly indicating a rush to purchase before rates climbed further.
Recent data shows a shift in the housing market dynamics of South Campus. In 2023, average home prices decreased significantly to $379,946, down 7% from 2022. This trend continued into 2024, with prices further declining to $373,765. These decreases coincided with a sharp increase in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024. The higher interest rates likely contributed to the cooling of the housing market in the neighborhood.
Looking ahead, predictive models forecast that average home prices in South Campus may experience a period of stabilization or modest growth over the next five years, assuming interest rates remain elevated. The recent decline in prices could potentially make homeownership more attainable for some residents, possibly leading to a slight increase in the homeownership rate. For average rent prices, an upward trend is projected as the housing market adjusts to higher interest rates, potentially pushing more residents towards renting in the short term.
In conclusion, South Campus has demonstrated resilience in its housing market despite significant economic changes. The neighborhood's consistent renter majority reflects its appeal to the student population, while the steady appreciation of home values until recent years indicates its desirability as a residential area. The recent decline in home prices, coupled with rising interest rates, may reshape the housing landscape in the coming years, potentially offering new opportunities for both renters and prospective homeowners in this dynamic Chico neighborhood.
