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Zip Code 07111: Newark's Shifting Housing Landscape Sees Soaring Home Values and Declining Ownership
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 07111, located in Newark, New Jersey, has experienced significant changes in homeownership rates, average home prices, and average rent prices over the past decade. This area has seen a general trend of decreasing homeownership and increasing rental occupancy, alongside fluctuating property values and rent costs.
The homeownership rate in zip code 07111 has shown a notable decline from 33% in 2013 to 30% in 2022. This decrease coincides with a dramatic shift in average home prices. In 2013, the average home price was $112,327, which then dropped to its lowest point of $102,472 in 2014. However, from 2014 onwards, there was a substantial increase in average home prices, reaching $315,983 by 2022. This represents a striking 208% increase in average home values over eight years, despite the declining rate of homeownership.
Federal interest rates play a crucial role in homeownership trends. From 2013 to 2016, interest rates remained exceptionally low, ranging from 0.11% to 0.4%. During this period, homeownership rates in zip code 07111 remained relatively stable, only declining slightly from 33% to 30%. However, as interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), we observe a sharper decline in homeownership rates, dropping to 28% by 2019. This trend suggests that rising interest rates may have contributed to making homeownership less accessible in this area.
Conversely, the percentage of renters in zip code 07111 increased from 67% in 2013 to 70% in 2022. This rise in rental occupancy has been accompanied by fluctuations in average rent prices. In 2013, the average rent was $1,102, which increased to $1,124 by 2020, representing a modest 2% increase over seven years. However, there was a notable jump to $1,210 in 2021, followed by a decrease to $1,120 in 2022. These rent price changes, coupled with the increasing renter population, suggest a complex interplay between housing demand and affordability in the area.
As of 2024, the average home price in zip code 07111 has reached $366,070, marking a further 15.9% increase from 2022. This continued rise in home values occurs alongside a significant increase in federal interest rates, which stand at 5.33% in 2024. This combination of high home prices and elevated interest rates could potentially further impact homeownership rates in the area.
Looking ahead, predictive models suggest that average home prices in zip code 07111 may continue to rise over the next five years, potentially reaching around $450,000 by 2029. Average rent prices are also expected to increase, possibly approaching $1,300 per month during the same period. These projections are based on current trends and historical data patterns.
In summary, zip code 07111 has experienced a significant shift towards rental occupancy, with homeownership rates declining as average home prices have more than doubled since 2014. The interplay between federal interest rates, home prices, and rental demand has shaped the housing market in this area. As average home prices continue to rise and interest rates remain elevated, the trend towards increased renting may persist, potentially putting upward pressure on rent prices in the coming years.
