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Zip Code 95818: Sacramento's Resilient Housing Market Sees Average Home Values Soar to $750,326
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 95818, located in Sacramento, California, encompasses an urban area of 4.0 square miles that has experienced significant changes in homeownership rates and housing prices over the past decade. From 2013 to 2022, this neighborhood witnessed a gradual increase in owner-occupied housing, accompanied by substantial growth in average home prices and rent values.
The percentage of owner-occupied housing in zip code 95818 increased from 51% in 2013 to 53% in 2022, indicating a slight trend towards increased homeownership. This change coincided with a significant rise in average home prices, which grew from $401,577 in 2013 to $750,326 in 2022, representing an 86.8% increase over nine years. The relationship between ownership rates and home prices suggests that despite the rising costs, more residents were able to transition into homeownership during this period.
Federal interest rates played a crucial role in homeownership trends. From 2013 to 2016, interest rates remained extremely low, ranging from 0.11% to 0.40%. This period coincided with a steady increase in homeownership rates from 51% to 52%. As interest rates began to rise more significantly from 2017 (1.00%) to 2019 (2.16%), homeownership rates stabilized around 52-53%. The low-interest-rate environment likely contributed to making homeownership more accessible, even as home prices continued to climb.
Renter percentages in zip code 95818 showed a corresponding decline from 49% in 2013 to 47% in 2022. During this same period, average rent prices increased from $1,070 in 2013 to $1,344 in 2022, a 25.6% rise. The population of the zip code also grew from 19,671 in 2013 to 23,292 in 2022, potentially contributing to increased demand for rental properties and subsequent rent price increases. Despite the rising rents, the slight decrease in the percentage of renters suggests that some residents may have transitioned to homeownership during this period.
In 2023, the average home price in zip code 95818 decreased to $710,307, a 5.3% drop from the previous year. This decline continued into 2024, with prices slightly recovering to $723,488. Interestingly, federal interest rates rose sharply to 5.02% in 2023 and further to 5.33% in 2024, potentially influencing the housing market dynamics and contributing to the observed price fluctuations.
Looking ahead, predictive models suggest that average home prices in zip code 95818 may experience moderate growth over the next five years, potentially reaching around $800,000 by 2029. Average rent prices are also expected to continue their upward trend, possibly surpassing $1,500 per month within the same timeframe. These projections assume relatively stable economic conditions and continued population growth in the area.
In summary, zip code 95818 has demonstrated a gradual shift towards increased homeownership despite rising home prices. The interplay between federal interest rates, population growth, and housing market dynamics has shaped the area's real estate landscape. The recent dip in home prices, coupled with rising interest rates, may signal a period of market adjustment. However, the long-term trend suggests continued appreciation in both home values and rent prices, reflecting the ongoing desirability of this Sacramento neighborhood.
