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Zip Code 20872: Rising Home Values and High Ownership Rates in Damascus, Maryland
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 20872, located in Damascus, Maryland, is a predominantly suburban area known for its blend of residential communities and natural landscapes. Over the past decade, this zip code has experienced notable shifts in homeownership rates and housing prices, reflecting broader economic trends and local market dynamics. The homeownership rate in zip code 20872 has remained relatively stable, with a slight increase from 85% in 2019 to 88% in 2022. This high rate of homeownership coincides with a significant rise in average home prices. In 2013, the average home price was $338,495, which steadily increased to $509,644 by 2022, representing a 50.6% increase over nine years. This upward trend in home prices appears to have had minimal impact on the overall homeownership rate, suggesting a strong preference for homeownership in this area despite rising costs.
Federal interest rates have played a crucial role in shaping homeownership trends in zip code 20872. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.09% to 0.4%, which coincided with a slight increase in homeownership from 87% to 88%. As interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), there was a minor dip in homeownership to 85%. However, the dramatic drop in interest rates in 2020 (0.38%) and 2021 (0.08%) corresponded with a rebound in homeownership to 89%, illustrating how lower interest rates can stimulate home buying activity.
The rental market in zip code 20872 has shown interesting trends in relation to homeownership rates. The percentage of renters fluctuated between 11% and 15% from 2013 to 2022. Average rent prices have generally increased, rising from $1,617 in 2013 to $1,587 in 2022, with some fluctuations in between. Notably, there was a significant jump in average rent to $1,825 in 2021, coinciding with the highest homeownership rate of 89%, suggesting a possible shortage of rental properties during this period.
In 2023 and 2024, the housing market in zip code 20872 continued to evolve. The average home price reached $521,402 in 2023 and further increased to $534,586 in 2024, representing a 4.9% growth over two years. This growth occurred despite a significant rise in federal interest rates, which reached 5.02% in 2023 and 5.33% in 2024, levels not seen since before the 2008 financial crisis.
Looking ahead, based on historical trends and current market conditions, we can expect average home prices in zip code 20872 to continue their upward trajectory, albeit at a potentially slower pace due to higher interest rates. A five-year forecast suggests average home prices could reach approximately $600,000 by 2029. Rent prices are likely to follow a similar upward trend, potentially reaching an average of around $1,800 to $1,900 per month in the same timeframe.
In summary, zip code 20872 demonstrates a robust housing market characterized by high homeownership rates and steadily increasing property values. The area has shown resilience to economic fluctuations, maintaining strong homeownership levels even as prices rise. The interplay between interest rates, home prices, and rental rates continues to shape the local real estate landscape, with recent trends pointing towards sustained growth in both the ownership and rental sectors.
