Several fundamental reasons bring the market of Birmingham real estate among the best cities for that point. Among the reasons is the fact that more businesses and residents are moving in. A significant reason for that is the more affordable living cost in the city of Birmingham compared to the previous places of those businesses and residents. Apart from those matters, there are many more things about the housing market in Birmingham to check and consider thoroughly.
PolicyGenius elaborates that Birmingham is the fifth city on the list of the most popular housing markets for investors. There are Phoenix, Las Vegas, and Tampa behind Alabama on this matter. So, it is easy to say that there will always be competition between regular buyers and experienced investors with a lot of money in their pockets. It brings the market of Birmingham Alabama real estate to increasing popularity. Of course, the city itself offers a lot more things.
The City of Birmingham, Alabama
Founded in 1871, Birmingham is currently the most populated city in the state of Alabama. Therefore, it is only reasonable for Birmingham to become a hotspot in terms of its real estate market. Nevertheless, the 2021 census estimates that the population of Birmingham will go down 1% from 2020. It may not be too important for the housing market in the city itself. The fact that it is a pivotal regional hub backs up the situation of its real estate market at the moment.
Birmingham is the cradle of the American Civil Rights Movement. The economy is at its best with 4,000% growth in its first 40 years of the active period as a city. Mining and manufacturing were the key elements in the astonishing economy of the city. At the moment, the city becomes a hub for various things that include banking services and even medical research. Nevertheless, the manufacturing roots remain in the city. Thus, it is reasonable for Birmingham real estate to attract many people.
The Population of Birmingham
Any talk about real estate or the housing market will always come to the matter of population in a specific place. In many ways, the population itself fundamentally affects the market situation for the residential properties in the area. According to the official website of the city, its population is 209,880. That number comes from the US Census Bureau in 2019. The population of the metro area is 856,000, according to the most recent data from macrotrends in 2022.
The Birmingham-Hoover Metro area has the largest population in the state of Alabama. According to AL.com, the population of the city will experience an increase of over 76,000 in 2040. Thus, Birmingham real estate will most likely continue to rise annually. The US Census Bureau even reported that there is a 5% decline in the population in 10 years. Although the population experienced a decline regularly, the strong inbound migration and stable birthrate in the city keep it in balance.
Job Market and Quality of Life in Birmingham
The matter of the housing market Birmingham is more than just about the properties. The quality of life in the city as well as the job availability in it affects the overall market situation for the housing units. The Birmingham metro area is among the best places for business growth. That comes from several publications from Business Facilities, Indeed.com, and fDi Magazine. Thus, it is reasonable to say that Birmingham offers a top-notch job market for its residents who need high-quality jobs.
There are several factors to understand about the job market in Birmingham, indeed. One of them is job growth which sits at 1.5%. Although it has declined slightly annually, Data USA elaborates that the median household incomes increase at a 3.47% rate annually. Even the hourly wages in Birmingham grew 3.9% from last year, according to the report of Birmingham Business Alliance. In many ways, the business and job atmosphere in Birmingham is in a top-notch state at the moment.
In terms of the quality of life in Birmingham, Alabama, Numbeo states that it has a very high quality of life index. It comes at 162.24 points with the property price to income ratio among the best things there. Furthermore, both the climate and traffic commute time indexes are also at the appropriate level. Thus, it is reasonable for the residents of Birmingham to enjoy the city in its many aspects. A good economy, tons of available jobs, and top-notch facilities contribute to the quality of life there.
Living cost is another thing that affects the quality of life in Birmingham, Alabama. At the moment, the living cost in Birmingham is 6% higher than the state average. Yet, it is 6% lower than the national average. That data comes from RentCafe which also elaborates that the housing cost in Birmingham is 19% lower than the national average. Thus, it is reasonable for the living cost in the metropolitan area to remain affordable compared to the national average at the moment.
Furthermore, US News & World Report puts Birmingham as one of the best places to live in the United States of America. In terms of the healthcare facility and service, the Princeton Baptists Medical Center is one of the best hospitals in the greater metro area of Birmingham as well as Alabama state. Those are also the most crucial things that affect the top-notch quality of life of the residents of Birmingham, Alabama. So, why hesitate to move there?
Housing Market of Birmingham
When it comes to the market of Birmingham real estate, a lot of investors know all about it already. Among the things about the market for housing units in Birmingham is the fact that it is a hotspot for rental properties. Thus, many rental property investors are actively searching for the best deals in the city and metro area of Birmingham. A recent report from WalletHub includes Birmingham as the best place for renters.
Furthermore, according to Realtor.com, Birmingham sits within the top 25 housing markets in 2022. It further indicates that the price and sales in the Birmingham real estate market grow 13.7% from 2021. ACRE also elaborates that the rental market is a promising one with the low supply and high demand situation of the housing units in Birmingham. It comes from the 1.8-month supply of the available housing units for sale in the city.
The Alabama Center for Real Estate provides a report that homes for sale Birmingham AL in the metro area will not be available anymore in only 15 days. Another report from ACRE states that the median home sales price increases about 12% annually. Nevertheless, the closed sales declined by 6% while the inventory declined by 4% in the same period. Apart from those matters, the solid economic situation in Birmingham boosts the housing market in the city and metro area.
The Zillow Home Value Index is always important when talking about the housing market. Thus, it is necessary to check the value of homes for sale in the city of Birmingham, Alabama. At the moment, the ZHVI for a home in Birmingham is $105,772 per April 2022. That value experienced an increase of 23.9% from the value in April 2021. Meanwhile, over five years the value has increased close to 88%. It indicates the fact that the housing market in Birmingham is in its best state.
Another thing to know about the Birmingham Alabama real estate market is the median listing price for a residential house there. In April 2022, Realtor elaborated that the price is at $170,000. Meanwhile, the so-called square foot listing price is $114. Furthermore, the median sold price for a house in Birmingham is $210,000, with the average days on the market at 39 days. It gets better with the 100% sale-to-list price ratio in the area of Birmingham.
It was previously mentioned that the rental market for Birmingham real estate is a top-notch one. The indication comes from the median rent price for a 3-bedroom house is $1,245 for a month in June 2022. According to Zumper, the rent price has increased 14% from June 2021. Another indication of the hot rental market in Birmingham is that 49% of housing units there are occupied by active renters. That 49% of rent comes with a monthly rental price between $1,001 and $1,500.
At this point, it is easy to say that investing in the real estate market of Birmingham is a top-notch idea at the moment. Wallet Investor predicts that there will be slight declines in the overall price for housing units in Birmingham in 2023. Yet, looking at the previous records, the market will remain in a top-notch state. It is visible in the April 2022 FMHPI for the Birmingham-Hoover metro area which shows about a 93% increase in home prices for the last ten years in Birmingham.
Birmingham Real Estate Market FAQS
Is It a Good Idea to Invest in the Real Estate Market of Birmingham?
Investment is always tricky stuff for a lot of people. Even for experienced investors, it can be hard to consider many factors before investing. Nevertheless, looking at the Birmingham metro population growth, it is a good idea to invest in housing units there. According to Niche.com, residents of Birmingham live their life excellently. It means more people will come and reside in Birmingham, which adds to the demand for housing units for sale or rent.
What Are the Pros and Cons of Living in Birmingham, Alabama?
Meanwhile, potential house buyers will frequently ask about the good things and bad things about living in Birmingham. Housing cost is among the pros of residing in Birmingham, AL. It remains below the national average, which can be highly affordable for a lot of people. Furthermore, the living cost is also affordable because it sits below the national average. The weather and diverse environment of Birmingham are also among the good things about living there.
On the other hand, sales tax is somewhat high in Birmingham. At the moment, the sales tax is at 10%, which is above 7.25% of the national average. It affects a lot of things, indeed. Then, the public transport in the city may not be as decent as in other cities. It lacks availability and size. Therefore, it can be overwhelming for those who rely on public transport in their daily routine. Lastly, the summer is very hot in the city of Birmingham, Alabama.
Where Is the Cheapest Area in Birmingham to Buy or Rent a House?
Before buying a house in Birmingham, it is crucial to know the area with the cheapest sale and rent prices. There are 92 neighborhoods in Birmingham at the moment. Ensley Highlands is the one with the lowest median listing price of $65,000. On the other hand, Highland Park comes as the most expensive area with its median listing price of $699,000. Nevertheless, the places with the lowest sale price may not have available houses for sale too often.
In terms of the housing units for rent, several neighborhoods are the most expensive ones. Southside Birmingham, Central City, and Belle Meade are the ones with the highest rent prices between $1,551 and $1,754. Meanwhile, the lowest rent price is available at College Hills, East Thomas, and Acipco-Finley. The average rent price in those areas is only $481. It all comes down to personal preferences when searching for houses for rent in Birmingham.
Birmingham real estate is ultimately hot at the moment. The increase in both its sale and rent price are significant over the last couple of years. Nevertheless, it remains affordable to look for a dwelling in the city of Birmingham, Alabama. The quality of life is at a decent level, with a perfect environment for businesses to grow as well. In many ways, there is no need to hesitate when looking for a housing unit in Birmingham. The choice varies widely, from the most affordable one to the most expensive one.