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Zip Code 95605: Average Home Values and Ownership Trends in West Sacramento's Resilient Real Estate Market
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 95605, located in West Sacramento, California, has experienced significant changes in homeownership rates and housing prices over the past decade. This area has seen fluctuations in its ownership-to-renter ratio, with a general trend towards increased homeownership in recent years. Average home prices have shown substantial growth, while average rent prices have remained relatively stable with some fluctuations.
The homeownership rate in zip code 95605 has seen an overall increase from 37% in 2014 to 46% in 2022. This upward trend in homeownership coincides with a substantial rise in average home prices. In 2014, the average home price was $173,989, which steadily increased to $422,213 by 2022, representing a remarkable 143% increase over eight years. This correlation suggests that despite rising home prices, more residents in this area have been able to transition into homeownership.
Federal interest rates have played a significant role in homeownership trends. From 2014 to 2016, interest rates remained low, ranging from 0.09% to 0.40%, which likely contributed to the increase in homeownership from 37% to 40% during this period. As interest rates began to rise more significantly from 2017 (1%) to 2019 (2.16%), we see a slight dip in homeownership to 37% in 2018. However, the dramatic drop in interest rates to 0.38% in 2020 and 0.08% in 2021 coincides with a rebound in homeownership to 43% by 2021.
Renter percentages in zip code 95605 have generally decreased from 63% in 2014 to 54% in 2022, inversely mirroring the homeownership trend. Average rent prices have shown some fluctuation but overall stability compared to home prices. In 2013, the average rent was $1,099, which remained relatively steady, reaching $1,121 in 2018 before decreasing to $979 in 2022. This represents only a 10.9% decrease over nine years, much less volatile than the changes in home prices. The relative stability of rent prices, combined with rising home values, may have incentivized more residents to consider homeownership.
In 2023, the average home price in zip code 95605 decreased to $407,426, marking a 3.5% drop from the previous year. This slight correction continued into 2024, with prices rebounding slightly to $413,772. Notably, federal interest rates increased significantly to 5.02% in 2023 and 5.33% in 2024, which could potentially impact future homeownership rates and housing market dynamics in this area.
Looking ahead, based on historical trends and current market conditions, we can project some potential scenarios for the next five years. Average home prices may continue to experience moderate growth, potentially reaching around $450,000 to $480,000 by 2029, assuming a conservative annual growth rate of 2-3%. Average rent prices might see a gradual increase, potentially reaching $1,100 to $1,200 per month by 2029, considering historical fluctuations and inflationary pressures.
In summary, zip code 95605 has demonstrated a trend towards increased homeownership despite rising home prices. The interplay between federal interest rates, home prices, and rent costs has shaped the housing market dynamics in this area. While homeownership has grown, the recent uptick in interest rates and the slight correction in home prices suggest a potential stabilization in the market. The coming years may see continued but more moderate growth in both home prices and rent, with homeownership rates potentially stabilizing or slightly increasing depending on economic conditions and interest rate movements.
