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Zip Code 02115: Rising Home Values and Persistent Renter Majority in Boston's Educational Hub
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
Zip code 02115, located in Boston, Massachusetts, is a vibrant urban area known for its diverse population and proximity to several prestigious educational institutions. Over the past decade, this zip code has experienced notable shifts in homeownership rates and housing costs, reflecting broader economic trends and local market dynamics. The homeownership rate in zip code 02115 has remained relatively stable, fluctuating between 12% and 14% from 2013 to 2022. During this period, average home prices have shown a significant upward trend. In 2013, the average home price was $522,716, which steadily increased to $907,719 by 2022, representing a remarkable 73.6% increase over nine years. This substantial rise in home values did not correspond with a significant change in homeownership rates, suggesting that other factors were influencing the local housing market.
Federal interest rates have played a role in shaping homeownership trends in zip code 02115. From 2013 to 2016, when interest rates were at historic lows (ranging from 0.09% to 0.4%), the homeownership rate increased slightly from 12% to 14%. However, as interest rates began to rise more sharply from 2017 onwards, reaching 1.68% in 2022, the homeownership rate remained steady at 13-14%. This suggests that while lower interest rates may have initially encouraged some home purchases, other factors such as high property values and local economic conditions likely had a more significant impact on homeownership rates in this area.
The rental market in zip code 02115 has shown its own distinct trends. The percentage of renters has remained consistently high, ranging from 85% to 87% between 2013 and 2022. During this period, average rent prices have steadily increased. In 2013, the average rent was $1,332, which rose to $1,612 by 2022, marking a 21% increase over nine years. This upward trend in rent prices, coupled with the high percentage of renters, indicates a strong and persistent demand for rental properties in the area. The population in the zip code has fluctuated somewhat, from 28,562 in 2013 to 27,222 in 2022, but has remained relatively stable overall, suggesting that the rental market has maintained its strength despite minor population changes.
In 2023 and 2024, the housing market in zip code 02115 showed signs of cooling. The average home price decreased from $907,719 in 2022 to $889,222 in 2023, and further to $865,003 in 2024, representing a 4.7% decrease over two years. This decline coincided with a significant increase in federal interest rates, which rose to 5.02% in 2023 and 5.33% in 2024. These higher interest rates likely contributed to the softening of home prices by making mortgages more expensive and potentially reducing buyer demand.
Looking ahead, based on recent trends and current market conditions, we can forecast potential scenarios for the next five years. For average home prices, if the current cooling trend continues, we might see a further decrease of 5-10% over the next five years, potentially bringing average home prices to around $780,000-$820,000 by 2029. However, if economic conditions improve and interest rates stabilize or decrease, we could see a return to modest growth, potentially reaching $900,000-$950,000 by 2029. For average rent prices, the consistent upward trend suggests continued growth, albeit potentially at a slower rate. We might expect average rents to increase by 10-15% over the next five years, potentially reaching $1,775-$1,850 by 2029.
In summary, zip code 02115 has demonstrated a resilient housing market characterized by consistently high rental occupancy and steadily increasing property values over the past decade. The recent cooling in home prices, influenced by rising interest rates, marks a significant shift in the market dynamics. Moving forward, the interplay between interest rates, local economic factors, and housing demand will be crucial in shaping the future of this Boston neighborhood's real estate landscape.
