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Zip Code 35540: Rising Home Values and Strong Ownership in Rural Alabama
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 35540, located in Addison, Alabama, has experienced fluctuating trends in homeownership rates and housing prices over the past decade. This rural area, known for its small-town charm, has seen interesting shifts in its real estate market dynamics.
The ownership percentage in zip code 35540 has shown a general upward trend from 2013 to 2022. In 2013, the homeownership rate was 77%, which increased to 85% by 2022. This rise in homeownership coincided with a significant increase in average home prices. In 2013, the average home price was $125,749, which steadily rose to $183,905 by 2022, representing a 46% increase over this period.
The relationship between federal interest rates and homeownership rates in this area appears to follow the well-established trend of lower interest rates encouraging homeownership. For instance, when interest rates were at historic lows between 2020 and 2021 (0.38% and 0.08% respectively), homeownership rates in the zip code reached their highest levels at 85% and 84%. This correlation suggests that the low-interest-rate environment made home financing more accessible for residents in Addison.
Renter percentages in zip code 35540 have generally decreased as homeownership rates increased. In 2013, 23% of residents were renters, which decreased to 15% by 2022. Interestingly, average rent prices have shown volatility during this period. The average rent rose from $469 in 2013 to a peak of $600 in 2018, before decreasing to $488 in 2022. This fluctuation in rent prices, coupled with the declining renter population, suggests a complex rental market influenced by factors such as local economic conditions and housing availability.
In 2023 and 2024, the average home prices in zip code 35540 showed a slight decline from the 2022 peak. The average home price in 2023 was $178,316, and in 2024 it slightly decreased to $178,003. This minor correction comes after several years of significant price appreciation. Notably, federal interest rates have risen sharply during this period, reaching 5.02% in 2023 and 5.33% in 2024, which may have contributed to the cooling of home prices.
Looking ahead, our predictive models forecast a moderate growth trajectory for both average home and rent prices in zip code 35540 over the next five years. Average home prices are expected to increase by approximately 2-3% annually, potentially reaching around $195,000 by 2029. Average rent prices are projected to grow at a similar rate, possibly reaching $550-$575 per month in the same timeframe. These projections assume stable economic conditions and a gradual normalization of interest rates.
In summary, zip code 35540 has demonstrated a strong trend towards homeownership, with increasing home values over the past decade. The area has shown resilience in its housing market, with homeownership rates remaining high even as average home prices have appreciated significantly. The rental market, while smaller, has shown more volatility in pricing. As we move forward, the area is poised for continued, albeit more moderate, growth in both home values and rental rates, reflecting the ongoing appeal of this Alabama community.
