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Zip Code 28387: Rising Home Values and Shifting Ownership in Southern Pines' Golf Haven
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 28387, located in Southern Pines, North Carolina, has experienced significant changes in its housing market over the past decade. This area, known for its picturesque golf courses and charming downtown, has seen notable shifts in homeownership rates and property values, reflecting broader economic trends and local demographic changes.
The homeownership rate in zip code 28387 has shown a gradual decline from 2013 to 2022. In 2013, 64% of residents owned their homes, but by 2022, this figure had decreased to 59%. This trend coincides with a substantial increase in average home prices. In 2013, the average home price was $213,709, but by 2022, it had risen dramatically to $408,452, representing a 91% increase over nine years. This sharp rise in home prices may have contributed to the decline in homeownership, as affordability became a growing concern for potential buyers.
Federal interest rates have played a significant role in shaping homeownership trends. From 2013 to 2016, interest rates remained low, hovering around 0.1% to 0.4%. During this period, homeownership rates in zip code 28387 remained relatively stable, ranging from 62% to 64%. However, as interest rates began to rise from 2017 (1%) to 2019 (2.16%), homeownership rates declined more noticeably, dropping to 58% by 2019. This trend aligns with the general principle that higher interest rates can make mortgages less affordable, potentially discouraging homeownership.
The rental market in zip code 28387 has shown a corresponding increase as homeownership rates declined. The percentage of renters rose from 35% in 2013 to 41% in 2022. This shift coincided with a steady increase in average rent prices. In 2013, the average rent was $872, but by 2022, it had climbed to $1,025, an increase of 17.5%. The rise in rent prices, while significant, was not as dramatic as the increase in home prices, potentially making renting a more attractive option for some residents. Additionally, the population growth from 13,216 in 2013 to 15,091 in 2022 likely contributed to increased demand for rental properties.
Looking at the most recent data, the average home price in zip code 28387 continued its upward trajectory, reaching $434,592 in 2023 and $450,483 in 2024. This represents a further 10.3% increase from 2022 to 2024. Concurrently, federal interest rates have risen sharply, reaching 5.02% in 2023 and 5.33% in 2024. These high interest rates, combined with elevated home prices, are likely to pose significant challenges for potential homebuyers in the area.
Applying predictive models to forecast 5-year trends, we anticipate that average home prices in zip code 28387 will continue to rise, albeit at a potentially slower rate due to the current high interest rate environment. By 2029, average home prices could reach approximately $525,000 to $550,000, assuming a moderated annual growth rate of 3-4%. For rent prices, we expect a continued upward trend, potentially reaching an average of $1,200 to $1,300 per month by 2029, based on historical patterns and anticipated demand.
In summary, zip code 28387 has experienced a notable shift from homeownership to renting over the past decade, driven by rapidly increasing home prices and fluctuating interest rates. The sharp rise in property values, while beneficial for existing homeowners, has created affordability challenges for potential buyers. The rental market has expanded in response, with both the number of renters and average rent prices increasing. As the area continues to grow and evolve, these housing market dynamics will likely play a crucial role in shaping the community's future development and demographic composition.
