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Zip Code 21655: Preston, Maryland's Housing Market Trends and Average Home Values
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
Preston, Maryland, zip code 21655, presents an intriguing case study of housing market dynamics in a small rural community. Over the past decade, this area has experienced notable shifts in homeownership rates and housing prices, reflecting broader economic trends and local market conditions. The homeownership rate in Preston has shown some fluctuation over the years, with a general downward trend from 2013 to 2020, followed by a recent uptick. In 2013, the homeownership rate stood at 84%, gradually declining to 74% by 2020. However, there was a rebound to 80% in 2022. This trend coincides with significant changes in average home prices. The average home price in the area increased from $166,312 in 2013 to $292,487 in 2022, representing a substantial 75.9% increase over this period.
Examining the relationship between federal interest rates and homeownership rates reveals some interesting patterns. The period from 2013 to 2015 saw relatively stable low interest rates (around 0.1-0.13%) and high homeownership rates (80-84%). As interest rates began to rise from 2016 onwards, reaching 2.16% by 2019, there was a corresponding decline in homeownership rates, dropping to 78% in 2019. The sharp drop in interest rates in 2020 (to 0.38%) and 2021 (to 0.08%) coincided with a temporary dip in homeownership to 74% in 2020, followed by a recovery to 77% in 2021 and 80% in 2022, despite rising interest rates.
The rental market in Preston has shown its own distinct trends. The percentage of renters increased from 16% in 2013 to a peak of 26% in 2020, before settling back to 20% in 2022. Average rent prices have been volatile, starting at $887 in 2013, peaking at $1,180 in 2016, and then fluctuating between $957 and $1,056 from 2015 to 2022. The most recent data shows average rent at $987 in 2022. These changes in the rental market occurred against a backdrop of fluctuating population, which peaked at 4,953 in 2017 before declining to 4,269 in 2022.
Looking at the most recent data, the average home price in zip code 21655 reached $294,905 in 2023 and further increased to $306,049 in 2024. This continued appreciation occurred despite the significant rise in federal interest rates, which stood at 5.02% in 2023 and 5.33% in 2024. This suggests strong underlying demand in the local housing market, potentially driven by factors such as limited housing supply or the area's attractiveness to homebuyers.
Applying predictive models to forecast 5-year trends, we anticipate a continued gradual increase in average home prices, potentially reaching around $340,000 by 2029. Rent prices are expected to follow a similar upward trajectory, potentially approaching $1,100 per month on average. However, these projections are subject to various economic factors and local market conditions.
In summary, Preston's housing market has demonstrated resilience and growth over the past decade. The area has maintained a high rate of homeownership despite significant increases in home prices and fluctuating interest rates. The rental market has shown adaptability, with rent prices remaining relatively stable despite changes in the renter population. The continued appreciation of home values, even in the face of rising interest rates, suggests a robust local housing market with potential for further growth in the coming years.
