According to the ACRE or Alabama Centre for Real Estate, the housing inventory in Montgomery real estate is at the lowest point in history, with the months of supply at just 1.1 as of April 2022. Months’ supply refers to the number of months needed for today’s inventory to sell at the given current sales price. The NAR reports that real estate markets with prices tend to increase more quickly and less than 6 months of supply, which is exactly what is happening in Montgomery.
Montgomery Alabama real estate market has seen a great improvement since the worst part of the recession. Equity has made an amazing comeback and homeowners are more willing to make moves than they have ever been in the past few years. That said, investment in Montgomery real estate has seen similar scenarios transpire. For all purposes and intents, Montgomery is heading in the right direction.
Montgomery is a hot market in 2022. It is a nice cash-flow market due to the high demand for rental housing. With a low living cost, lower taxes, and affordable home prices, this city is a great place to live as well as invest in real estate.
A Glimpse of Montgomery
Montgomery is the state capital of Alabama. This city is located alongside the Alabama River in south-central Alabama. It is about the same distance between the Gulf Coast city of Mobile to the south and Birmingham to the north. Considered as the birthplace of the civil rights movement, Montgomery is a great destination for those who are interested in the history of America.
The city is also the birthplace of many famous American figures, such as Nat King Cole and Zelda Fitzgerald. These are the reasons why Montgomery is one of the most important historical cities in the United States. Here, you can enjoy and explore so many tourist attractions. For example, the Montgomery Museum of Fine Arts, Riverfront Park, Alabama Shakespeare Festival, Scott & Zelda Fitzgerald Museum, and many more.
The population growth and job Montgomery is stable, thanks to industries like education, defense, manufacturing, and agriculture. As the centre of the civil rights movement, Montgomery is home to a variety of government and non-profit civic organizations.
Montgomery Real Estate Market Overview
The demand for homes in Montgomery surpasses the supply, just like in most real estate markets. However, rental property investors probably start to find good deals. The Alabama Centre for Real Estate reports that the demand for homes in the city has dropped by 20 percent, though the inventory decreases 21 percent from year to year.
The Montgomery AL real estate market continuously benefits from price growth relative to last year. However, while price increases have definitely slowed down in this capital of Alabama, the real estate in Montgomery is appreciating at a quicker pace than the rest of the nation, which is 7.1 percent and 5.7 percent respectively.
The current median home price in Montgomery now has reached $138,700. Though it is significantly lower than the national average, this price is considerably more affordable. That said, affordability should keep being the driving force of both demand and supply in the historical city. Millennials and first-time buyers should see the housing market in Montgomery more appealing compared to most others.
The median sales price in Montgomery was $215,000 as of March 2022. This increased 10.8 percent from a year ago and 5.5 percent from February, as reported by the Montgomery Area Association of Realtors. The median home sale price is the midway point of the units or homes sold over a particular period of time. It provides a more accurate view of what is happening in a market.
There is a serious lack of inventory in the Montgomery Alabama real estate. Looking at today’s sales pace, all the active inventory in the market would sell within only a month. Based on the quarterly report published by the Alabama Centre of Real Estate, the residential sales in the city for the first quarter of 2022 reached 1,359 units, decreasing by 1.3 percent compared to 1,377 units sold in the first quarter of 2021.
- According to Realtor.com, the median home listing price in Montgomery is $160,000 as of April 2022.
- Home values in Montgomery have gone up by 21.1 percent over the last year and by more than 42 percent over the last 5 years.
- Homes for sale in Montgomery AL spend averagely 49 days in the market from listing to being sold.
- According to the Alabama Centre for Real Estate (ACRE), the inventory in Montgomery decreases 36 percent from year to year, with only a 1.1 month supply of houses for sale.
- Sales of houses declined 20 percent from year to year as of April 2022. While the median sales prices have risen 17 percent over the past year.
- Of the 18 neighbourhoods in Montgomery, the most affordable one to buy a home is Cypress Creek and Hampstead is the most expensive neighbourhood in the city.
Montgomery Real Estate Trends
The housing market trends in Montgomery show a gain of 10.8 percent from year to year in median sales price based on 532 home sales. The median sales price was $215,000 in March, growing 10.8 percent from a year ago and rising 5.5 percent from February. This different sample size can contribute to statistical volatility, including pricing.
ACRE suggests consulting with a local real estate expert to discuss pricing since it will be varied from one neighbourhood to another. Montgomery home sales in March declined 8.4 percent year-over-year, from 581 to 532 closed transactions, according to the Montgomery Area Association of Realtors. Following the seasonal trends, sales were up 23.7 percent from February. Sales now decrease 1.3 percent year-to-date.
The 60 new homes sold in Montgomery represented 11.3 percent of all residential sales in March. Total sales dropped 27.7 percent year-over-year. The median sales price in March in Montgomery was $364,091, rising 19.5 percent from a year ago and increasing 3.2 percent from February. New homes in the market sold averagely within 63 days, 24 days quicker than March last year.
Montgomery Real Estate Forecast
Montgomery had some of the lowest real estate appreciation rates in the United States over the past decade, where home values have risen just 20.54 percent. This is an annualized rate of 1.89 percent. This rate is lower compared to the appreciation rate found in 90 percent of the towns and cities in the country. Appreciation rates in Montgomery have trailed the rest of the country over the past year. The appreciation rate in this city has been 14.33 percent in the past 12 months.
This percentage is lower than appreciation rates found in most communities in the United States. In the latest quarter, the data from NeighborhoodScout shows that home appreciation rates in Montgomery were at 7.52 percent, which is at the same level as an annual appreciation rate of 33.63 percent. According to Zillow, house values in Montgomery County have increased 20.7 percent over the last year as well as 34.78 percent over the last decade.
Looking at these data and seeing the inventory of homes for sale, it is forecasted that home values and prices in Montgomery will continue to increase in the foreseeable future. This makes Montgomery a hot seller’s market.
Population Growth in Montgomery
The population growth in the Montgomery metropolitan area has lowered by around 1.3 percent over the last 10 years, based on the most recent data from the US Census Bureau. This is in accordance with the rate of population change in other big cities in the state of Alabama, such as Mobile and Birmingham. Here are some stats about the population growth in Montgomery.
- Almost 201,000 residents and more than 386,000 people in the metropolitan area call Montgomery a home. This makes Montgomery the 3rd most populated city in Alabama as well as the 119th most populated city in the United States.
- The population in Montgomery decreased by 0.19 percent last year. However, it has been trending upward since 2016.
- More than 614,000 people live within a 50-mile radius from Montgomery County.
Job Market in Montgomery
Recently, the state of Alabama created 17,000 new jobs as well as set a new record with $8.7 billion in new investment, under the brand Made in Alabama. So, Montgomery receives its fair share of economic activities and stimulus as the capital city of the state. The unemployment rate in Montgomery is just a little bit better than the national average.
At 5.5 percent, unemployment in the capital state has only improved 0.4 percent over the last year. Moreover, the local employment growth in Montgomery has been poor and needs to improve. Though the employment situation in this city is just slightly better than the national average, it is such good news that this city is affordable.
Not only the real estate market, but the overall country is more affordable than most other cities across the nation. While homeowners in Montgomery typically spend around 7.8 percent of their income on monthly mortgage obligations, the rest of the county is used to spending around 15.1 percent. This is surely a big difference especially for millennials and first-time buyers who find it more difficult to save money.
- According to the Federal Reserve Bank of St. Louis, the GPD of Montgomery is almost $15.8 billion.
- Forbes ranks Montgomery as among the top 200 places in the United States for careers and businesses.
- Under the brand Made in Alabama, the capital city of the state has received more than $500 million in investment.
- Based on Data USA, the job growth in Montgomery has gone up by 5.27 percent last year.
- According to research from the US Bureau of Labour Statistics, Montgomery’s unemployment rate is 2.4 percent. Also, the rate has been decreasing over the last year.
- The median household income in Montgomery is slightly less than the amount in the state of Alabama, which is $49,608.
- The living cost in the city is 8 percent below the national average. The number also ranks the lowest among other Southeastern state capital cities, as reported by Forbes.
- Major industries in the greater Montgomery area include automotive, medical, cyber and technology, advanced manufacturing, and military and defense.
- Wind Creek Casino & Hotel Wetumpka, ALFA Insurance Companies, Baptist Health, and Montgomery Public Schools are some of the largest employers in Montgomery County.
- Montgomery is home to big industrial companies, such as International Paper, GKN Aerospace, Koch Foods, and Hyundai Motor Manufacturing Alabama.
- The capital city of Alabama is also home to the biggest public and private colleges and universities, including Faulkner University, University of Alabama Birmingham, Auburn University at Montgomery, Troy University, and Alabama State University.
Life Quality in Montgomery
Many people decide to move to Montgomery because of its high life quality, low living cost, and the warm Southern hospitality. The job market in this city is a perfectly balanced combination of production and service sectors. Montgomery offers a small-town charm that is not easy to find in other cities of similar size, thanks to the sophisticated healthcare, vibrant retail and dining, as well as world-class culture.
- AreaVibes gives Montgomery high ratings for living costs and amenities.
- Montgomery receives high scores from the US News & World Report for infrastructure, economy, and population health.
- 13 different movies are set in Montgomery, including Selma, Heavens Fall, and The Rosa Parks Story.
- Montgomery is among the best cities in the country to retire and for low living costs.
- The Montgomery metropolitan area is home to some hospitals, such as Jackson Hospital and Baptist Medical Center South. The area serves as the region’s healthcare centre.
- Montgomery has many tourist attractions, including the National Memorial for Peace and Justice and Montgomery Museum of Fine Arts.
Montgomery Real Estate Market FAQs
- Is Montgomery Real Estate Affordable?
Yes, in fact, affordability has been the driving force of both and supply and demand in the city. The typical home value in Montgomery is $178,769.
- Is Montgomery Tax Friendly?
Not only Montgomery is tax friendly, but Alabama is low in taxes. The state and local tax burden typically rank one of the best in the United States.
