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Zip Code 86351: Rising Home Values and Shifting Ownership in Village of Oak Creek
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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 86351, located in the Village of Oak Creek (Big Park), Arizona, is a picturesque area known for its stunning red rock formations and proximity to Sedona. This area has experienced notable shifts in homeownership rates and property values over the past decade, reflecting broader economic trends and local market dynamics. The homeownership rate in zip code 86351 has shown a gradual decline from 2013 to 2022. In 2013, 69% of residents were homeowners, while by 2022, this figure had decreased to 64%. Simultaneously, average home prices have seen significant appreciation. In 2013, the average home price was $353,147, which more than doubled to $802,530 by 2022. This inverse relationship between homeownership rates and average home prices suggests that rising property values may have made homeownership less accessible for some residents.
Federal interest rates have played a role in shaping homeownership trends in the area. The period from 2013 to 2016 saw historically low interest rates, ranging from 0.11% to 0.4%, which coincided with relatively stable homeownership rates around 69-72%. However, as interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), we observed a slight decrease in homeownership rates. The sharp drop in interest rates in 2020 (0.38%) and 2021 (0.08%) did not immediately reverse the downward trend in homeownership, possibly due to other economic factors at play.
Renter percentages in zip code 86351 have increased from 31% in 2013 to 36% in 2022, mirroring the decline in homeownership. Interestingly, average rent prices have shown volatility during this period. In 2013, the average rent was $1,754, which decreased to $1,287 in 2019 before rising again to $1,315 in 2022. This fluctuation in rent prices, coupled with the increasing renter population, suggests a complex rental market influenced by factors such as housing supply, local economic conditions, and possibly short-term rental dynamics in this tourist-oriented area.
Looking at the most recent data, the average home price in zip code 86351 slightly decreased from $802,530 in 2022 to $799,680 in 2023, marking a minor correction in the market. However, the average home price is projected to rise again to $824,754 in 2024. This continued appreciation occurs against the backdrop of significantly higher interest rates, with 2023 seeing rates at 5.02% and 2024 at 5.33%, levels not seen since before the 2008 financial crisis.
Applying predictive models to forecast 5-year trends, we anticipate continued appreciation in average home prices, albeit at a more moderate pace than the rapid growth seen in recent years. The high interest rate environment may temper price growth, but strong demand for housing in this desirable area is likely to sustain upward pressure on prices. For rent prices, we expect a gradual increase over the next five years, reflecting the growing renter population and the overall appreciation of property values in the area.
In summary, zip code 86351 has experienced a shift towards a higher proportion of renters, coupled with substantial appreciation in average home prices. The interplay between federal interest rates, local market dynamics, and broader economic trends has shaped these patterns. Moving forward, we anticipate continued, though more moderate, growth in both home prices and rents, with the potential for shifts in homeownership rates as the market adjusts to higher interest rates and evolving economic conditions.
