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Zip Code 35670: Rising Home Values and High Ownership Rates in Somerville, 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 35670, located in Somerville, Alabama, presents an interesting case study of homeownership and housing market trends. This area has experienced significant fluctuations in both population and housing dynamics over the past decade. Overall, the zip code has maintained a high rate of homeownership, with average home prices showing a general upward trend, while average rent prices have also increased.
The homeownership rate in zip code 35670 has remained relatively stable, albeit with some minor fluctuations. In 2013, the homeownership rate stood at 84%, and it maintained this level through 2016. There was a slight dip to 83% in 2017 and 2018, before rising to 85% in 2019. However, the rate decreased to 81% in 2020 and further to 79% in 2021, before slightly recovering to 80% in 2022. Concurrently, average home prices have shown a steady increase. In 2013, the average home price was $137,735, and it rose consistently year over year, reaching $241,233 in 2022, representing a 75% increase over this period.
The relationship between federal interest rates and homeownership rates in this zip code shows some correlation. As interest rates remained low from 2013 to 2015 (0.11% to 0.13%), homeownership rates held steady at 84%. When interest rates began to rise more significantly from 2016 to 2019 (0.40% to 2.16%), homeownership rates showed slight fluctuations but generally remained high. However, the sharp drop in interest rates in 2020 (0.38%) and 2021 (0.08%) coincided with a decrease in homeownership rates to 81% and 79% respectively, contrary to the general expectation that lower rates encourage homeownership.
Renter percentages in zip code 35670 have shown a slight increase over time, rising from 16% in 2013 to 20% in 2022. This trend has been accompanied by a significant increase in average rent prices. In 2013, the average rent was $578, which increased to $847 in 2019, representing a 47% increase. However, there was a notable drop to $689 in 2020, possibly due to the economic impact of the COVID-19 pandemic. The average rent then rose again to $774 in 2021 and slightly decreased to $707 in 2022. These fluctuations in rent prices occurred against a backdrop of declining population, from 9,062 in 2013 to 8,878 in 2022.
In 2023 and 2024, the housing market in zip code 35670 showed signs of stabilization. The average home price in 2023 was $236,639, a slight decrease from the 2022 peak of $241,233. This trend continued into 2024, with the average home price further decreasing to $236,029. Concurrently, federal interest rates rose significantly to 5.02% in 2023 and 5.33% in 2024, potentially influencing the slight cooling in the housing market.
Looking ahead, based on historical trends and current market conditions, we can expect the average home prices in zip code 35670 to stabilize or potentially see modest growth over the next five years. The recent plateau in prices, combined with higher interest rates, suggests a more balanced market. Average rent prices are likely to continue their upward trajectory, albeit at a more moderate pace, potentially reaching around $800-$850 by 2029. However, these projections could be influenced by broader economic factors and local market conditions.
In summary, zip code 35670 has maintained a high homeownership rate despite some recent declines, with average home prices showing substantial growth over the past decade. The rental market has seen an increase in both the percentage of renters and average rent prices, with some volatility in recent years. The area's housing market appears to be entering a period of stabilization, with recent data indicating a slight cooling in home prices amidst rising interest rates.
