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University Heights/Highlands: Rising Home Values and Declining Ownership Near NAU
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
University Heights/Highlands, a neighborhood in Flagstaff, Arizona near Northern Arizona University, has experienced significant changes in homeownership and housing costs over the past decade. In 2022, the area had 2,678 residents and approximately 1,026 housing units. The neighborhood has seen a general trend of decreasing homeownership rates and increasing average home prices, while average rent prices have shown fluctuations. The relationship between homeownership rates and average home prices in University Heights/Highlands demonstrates an inverse correlation. In 2013, the homeownership rate was 76%, with an average home price of $266,837. By 2022, homeownership had decreased to 59%, while the average home price had risen substantially to $652,338. This trend suggests that as home prices increased, fewer residents could afford homeownership, resulting in a shift towards renting. Federal interest rates have influenced homeownership trends in the neighborhood. From 2013 to 2016, when interest rates were historically low (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable at around 77%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates declined more steeply, dropping to 59% by 2022. This trend aligns with the principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
The renter population in University Heights/Highlands has grown as homeownership has declined. In 2013, only 24% of residents were renters, but by 2022, this figure had increased to 41%. Interestingly, average rent prices have not shown a consistent upward trend despite the increased demand for rentals. In 2013, the average rent was $1,412, and it fluctuated over the years, reaching $1,368 in 2022. This relatively stable rent price, despite increased demand, could be attributed to factors such as local rent control measures or an increase in rental inventory.
Looking at the most recent data, the average home price in University Heights/Highlands reached $656,221 in 2023 and further increased to $678,795 in 2024. This continued upward trend in home prices occurs alongside a significant rise in federal interest rates, which stood at 5.02% in 2023 and 5.33% in 2024. These high interest rates, combined with elevated home prices, may further challenge potential homebuyers in the neighborhood.
Applying predictive models to forecast 5-year trends, it is anticipated that average home prices in University Heights/Highlands will continue to rise, potentially reaching around $750,000 by 2029. Average rent prices are expected to show a moderate increase, potentially reaching approximately $1,500 per month in the same timeframe. These projections assume a continuation of current economic conditions and local market trends.
In summary, University Heights/Highlands has experienced a significant shift from homeownership to renting over the past decade, driven by rapidly increasing home prices and fluctuating interest rates. Despite the growing renter population, average rent prices have remained relatively stable. The neighborhood's housing market continues to evolve, with recent data showing persistently high home prices and interest rates, which may further impact homeownership rates in the coming years.
