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Zip Code 27605: Rising Home Values and Shifting Ownership in Raleigh's Urban Core
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 27605, located in Raleigh, North Carolina, has experienced significant changes in its housing market over the past decade. This urban area has seen fluctuations in homeownership rates, along with steady increases in both average home prices and average rent prices, reflecting the dynamic nature of Raleigh's real estate landscape.
The homeownership rate in zip code 27605 has shown a general decline from 2013 to 2022. In 2013, 42% of residents owned their homes, but by 2022, this figure had dropped to 34%. During this same period, average home prices rose substantially. In 2013, the average home price was $240,512, and by 2022, it had increased to $470,861, representing a 95.8% increase over nine years. This inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less attainable for some residents in the area.
Federal interest rates have played a role in shaping homeownership trends in zip code 27605. From 2013 to 2016, when interest rates were historically low (ranging from 0.11% to 0.4%), homeownership rates remained relatively stable, hovering around 35-42%. However, as interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), homeownership rates showed a slight decline, dropping from 38% in 2017 to 35% in 2020. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
The renter population in zip code 27605 has grown as homeownership has declined. In 2013, 58% of residents were renters, and by 2022, this figure had increased to 66%. Correspondingly, average rent prices have also risen, from $1,054 in 2013 to $1,247 in 2022, a 18.3% increase. The population of the zip code has also grown during this period, from 4,714 in 2013 to 5,504 in 2022, potentially contributing to increased demand for rental properties and subsequent rent price increases.
In 2023 and 2024, the housing market in zip code 27605 showed some interesting developments. The average home price in 2023 was $464,959, a slight decrease from 2022. However, in 2024, the average home price increased marginally to $465,520. These figures indicate a stabilization of home prices after years of rapid growth. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, reaching levels not seen since 2007. These higher interest rates may impact future homeownership trends and property values in the area.
Looking ahead, based on historical trends and current market conditions, we can project potential 5-year trends for average home and rent prices in zip code 27605. Average home prices are likely to continue their upward trajectory, albeit at a more moderate pace due to higher interest rates. We might expect average home prices to reach around $525,000 to $550,000 by 2029. Average rent prices are also expected to increase, potentially reaching $1,400 to $1,500 per month in the same timeframe, driven by continued population growth and demand for rental properties.
In summary, zip code 27605 has experienced a shift towards a renter-majority population over the past decade, accompanied by substantial increases in both average home prices and average rent prices. The interplay between federal interest rates, property values, and demographic changes has shaped these trends. As the area continues to evolve, it will be crucial to monitor how these factors influence the local housing market in the coming years.
