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Zip Code 90623: Home Values Double as Ownership Declines in La Palma, California
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
La Palma, California, zip code 90623, is a small suburban city located in Orange County that has experienced notable shifts in homeownership rates and housing costs over the past decade. The overall trend shows a gradual decrease in owner-occupied housing alongside an increase in average home prices and average rent prices.
From 2013 to 2022, the percentage of owner-occupied housing in La Palma decreased from 77% to 70%. During this same period, average home prices in the area saw a significant increase. In 2013, the average home price was $523,226, which rose steadily to reach $1,048,976 by 2022, representing a 100.5% 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.
The federal interest rates have played a role in homeownership trends in La Palma. From 2013 to 2016, when interest rates were extremely low (ranging from 0.11% to 0.40%), homeownership rates remained relatively stable at around 73%. However, as interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, homeownership rates declined to 70%. This trend aligns with the general principle that lower interest rates tend to encourage homeownership due to more affordable financing options.
As homeownership rates declined, the percentage of renters in La Palma increased from 23% in 2013 to 30% in 2022. Correspondingly, average rent prices also rose during this period. In 2013, the average rent was $1,772 per month, which increased to $2,359 by 2022, representing a 33.1% increase. The population of La Palma decreased slightly from 14,784 in 2013 to 14,686 in 2022, suggesting that the rise in rental prices was not primarily driven by population growth but rather by other market factors.
In 2023 and 2024, the housing market in La Palma continued to evolve. The average home price in 2023 was $1,068,511, showing a slight increase from 2022. In 2024, the average home price further rose to $1,141,575, indicating a continued upward trend in property values. Concurrently, federal interest rates increased significantly, reaching 5.02% in 2023 and 5.33% in 2024, which may impact future homeownership rates and housing affordability in the area.
Looking ahead, based on the historical data and current trends, we can project that average home prices in La Palma may continue to rise over the next five years, potentially reaching around $1.3 million by 2029. Average rent prices are also likely to increase, possibly surpassing $2,700 per month within the same timeframe. However, the rate of increase may slow down due to the higher interest rates and potential market stabilization.
In summary, La Palma has experienced a shift towards more renter-occupied housing, coupled with substantial increases in both average home prices and average rent prices. The interplay between federal interest rates, housing costs, and homeownership rates highlights the complex dynamics of the local real estate market. As property values continue to rise, affordability may remain a key concern for both potential homebuyers and renters in this Orange County community.
