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Should You Invest In Birmingham, Alabama Real Estate?

How is The Real Estate Market in Birmingham AL?

Birmingham, Alabama has come a long way from its Southern roots, though it retains its historic charm. Birmingham recently earned the title of being the South’s “Comeback Town”. The Birmingham metro area is among the nation’s top 10 best real estate markets for home buyers. The Birmingham AL real estate market continues to take steps in the right direction in 2019.

Single family rental homes are the single most common housing type in Birmingham AL real estate, accounting for about 60% of the city’s housing units. Property appreciation rates are so strong in Birmingham real estate market that despite a nationwide downturn in the housing market, Birmingham AL real estate has continued to appreciate in value much faster than most other top performing real estate markets in the US. Let us discuss the latest market trends and find out what are the prospects of Birmingham real estate investment in 2019.

Birmingham Real Estate Investment

Birmingham AL Real Estate Market Forecasts 2019 & 2020

Birmingham AL Real Estate Market

The median price of homes currently listed in Birmingham is $99,900 on Zillow.com. The median list price per square foot in Birmingham is $71, which is lower than the Birmingham-Hoover Metro average of $122. The median rent price in Birmingham is $885, which is lower than the Birmingham-Hoover Metro median of $1,075.

According to LittleBigHomes.com, the Birmingham AL real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. Their accuracy of the Birmingham real estate market trend prediction is 88%. Accordingly, they estimate that the probability for rising home prices in Birmingham is 88% during this period. If this Housing Market Forecast is correct, home prices will be higher in the 3rd Quarter of 2019 than they were in the 3rd Quarter of 2018.

Birmingham Housing Market Forecast 2019 – 2021

The Birmingham housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Birmingham housing market trend prediction is 82%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Birmingham is 82% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.

Check this page each quarter for updates to the Birmingham AL Real Estate Market Forecast.

Birmingham AL Real Estate Market Trends

Birmingham real estate market trends indicate an increase of $2,775 (1%) in median home sales and a 1% rise in median rent per month over the past year. The average price per square foot for this same period rose to $113, up from $112. Home values in the Birmingham AL real estate market have experienced three consecutive years of positive growth. Trulia has 1,333 resale and new homes for sale in Birmingham, AL, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

Birmingham AL Real Estate Market Trends

Graph Credits: Trulia.com

The median sales price for homes in Birmingham for Feb 2 to May 1 was $195,275 based on 778 home sales. Average price per square foot for Birmingham was $113, an increase of 1% compared to the same period last year. The median rent per month for apartments in Birmingham for Apr 7 to May 7 was $900.

Data by Redfin.com shows that the Birmingham housing market is somewhat competitive. Homes in Birmingham receive 1 offers on average and sell in around 53 days. The average sale price of a home in Birmingham was $265K last month, up 51.3% since last year. The average sale price per square foot in Birmingham is $119, up 21.4% since last year. Homes typically receive 1 offer. Homes in the Birmingham housing market sell for about 3% below list price and go pending in around 53 days. Hot Homes in Birmingham, AL can sell for around list price and go pending in around 31 days.

Birmingham Housing Market Statistics

  • Average Listing Price: $195,275 (Trulia)
  • Median Rent Per Month: $900
  • Price Per Sqft: $113
  • Median Household Income: $36,004
  • Home Owners: 62%
  • Single Residents: 38%
  • Median Age: 38
  • College Educated: 29%
  • Transportation: 99% people commute by car

There are 3,229 homes for sale in Birmingham, ranging from $1.1K to $7M on Realtor.com. 219 of which were newly listed within the last week. Additionally, there are 449 Birmingham rental properties up to $4.5K per month. In  February 2019 the housing market in Birmingham, AL is a balanced market, which means there is a healthy balance of buyers and sellers in the market.

Birmingham Housing Market Trends

Sale-to-List Price Ratio: 98.21% | Realtor.com

In February 2019, the median list price of homes in Birmingham, AL was $235K, trending up 4.5% year-over-year. The median listing price per square foot was $128. The median sale price was $224.5K. Homes in Birmingham, AL sold for 1.79% below asking price on average in February 2019. On average, homes in Birmingham, AL sell after 66 days on the market. The trend for median days on market in Birmingham, AL is flat since last month, and flat since last year.

Birmingham Housing Market Trend

Graph Credits: Realtor.com

The median list price in Birmingham, AL is $90,000 on Movoto.com. The median list price in Birmingham went up 5% from April to May. Birmingham’s home resale inventories is 670, which increased 7 percent since April 2019. The median list price per square foot in Birmingham is $43. April 2019 was $21.Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in May.

Birmingham AL Real Estate Market Trend

Graph Credits: Movoto.com

Birmingham, AL Single Family And Multi-Family Homes

Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.

As per the data from the real estate company called Neigborhoodscout.com, the median house price in Birmingham, AL is $96,330, which indicates that home prices in Birmingham are well below the national average for all cities and towns. Single family detached homes are the single most common housing type in Birmingham, accounting for 60.39% of the city’s housing units.

Other types of housing that are prevalent in Birmingham include large apartment complexes or high rise apartments ( 30.27%), duplexes, homes converted to apartments or other small apartment buildings ( 7.07%), and a few row houses and other attached homes ( 1.49%).

People in Birmingham primarily live in small (one, two or no bedroom) single-family detached homes. Birmingham has a mixture of owner-occupied and renter-occupied housing. Currently, there are 584 single family homes for sale in Birmingham, AL on Zillow. Additionally, there are 292 single family homes for rent in Birmingham, AL. Under potential listings, there are about 65 Foreclosed and 216 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a Birmingham’s multiple listing service (MLS).

Birmingham, AL Foreclosures And Bank Owned Homes

The percent of delinquent mortgages in Birmingham is 2.1%, which is higher than the national value of 1.1%, according to Zillow.com. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Birmingham homeowners underwater on their mortgage is 26.5%.

  • Foreclosures in Birmingham = 535 (RealtyTrac)
  • Homes for Sale in Birmingham = 1,603
  • Median List Price = $299,000 (13% ⇑ vs Mar 2018)

There are currently 535 properties in Birmingham, AL that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,603. In April 2019, the number of properties that received a foreclosure filing in Birmingham, AL was 33% higher than the previous month and 44% lower than the same time last year.

Home sales for March 2019 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in Birmingham was $0. The median sales price of a foreclosure home in Birmingham was $0, or 0% higher than non-distressed home sales.

Birmingham Home Prices And Real Estate Appreciation

Birmingham real estate appreciation rates have tracked to near the national average over the last then years, with the annual appreciation rate averaging 0.67% during the period. During the latest twelve months, Birmingham’s real estate appreciation rate, at 6.35%, has been at or slightly above the national average. In the latest quarter, Birmingham’s real estate appreciation rate has been 1.01%, which annualizes to a rate of 4.10%.

The above statistics on real estate appreciation in Birmingham were taken from NeighborhoodScout.com. You can visit their page for more information. Relative to Alabama, their data shows that Birmingham’s latest annual appreciation rate is higher than 70% of the other cities and towns in Alabama.

10 Best Neighborhoods In Birmingham For Real Estate Investment

There are 289 schools in Birmingham, AL. There are 100 elementary schools, 69 middle schools, 45 high schools and 75 private & charter schools. There are 105 neighborhoods in Birmingham. Some of the best neighborhoods in or around Birmingham, Alabama are Highland Park, Greystone and Crestwood South.

Greystone has a median listing price of $499.9K, making it the most expensive neighborhood. Roebuck is the most affordable neighborhood, with a median listing price of $57.4K. Here are the 10 best neighborhoods in Birmingham to invest in real estate because they have the highest real estate appreciation rates (List by Neigborhoodscout.com).

10 Big Reasons For You To Invest in Birmingham Real Estate in 2019

Investing in real estate is touted as a great way to become wealthy. Is Birmingham rental property good for investment? Planning to invest in the Birmingham, AL real estate market? Many real estate investors have asked themselves if buying a property in Birmingham is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.

We have already discussed the Birmingham housing market 2019 forecast for answers on why to put resources into this sizzling market. Home prices in Birmingham have been trending up 4.5% year-over-year. Here are the top 10 reasons to invest in the Birmingham real estate in 2019.

1. Birmingham Real Estate Is Affordable

Birmingham AL real estate is affordable for investors. The average home in Alabama was worth $161,853 according to a 2017 USA Today report. CNBC reported in 2017 that housing in Alabama was a quarter less expensive than the national average. For many considering relocating in search of work, Alabama’s very low cost of living – including housing – is reason enough to move there instead of Texas or Florida.

2. You Can Find Cheap Rental Properties In Birmingham AL

Birmingham AL real estate market remains among the most affordable markets in the nation, which bodes well for homeowners, investors and renters alike. The median home in Birmingham, Alabama is around $60,000. Compare this to a median home price in Dallas, Texas for around $150,000.

This means real estate investors could by two to three properties in Birmingham for the price of a home in Dallas, sometimes considered one of the hottest real estate markets in the country. You could buy several rental homes in Birmingham for the price of a single property in an expensive market in California.

3. There Is Opportunity in the Suburbs, Too

Suppose you don’t want to buy rental real estate in Birmingham. It is a million person plus metro area, so there are opportunities to invest in the suburbs, as well. Graysville is one such suburb, and its median home value was $76,400.

The median home value in Adamsville was just under $100,000 while Pleasant Grove homes cost around $150,000. This makes Birmingham AL real estate an excellent opportunity, since you can buy upscale suburban homes for less than a fixer-upper in the inner ring suburbs of many other cities.

4. The Area Is Growing, Both in Population and Rental Demand

There has been a distinct trend of people moving to the largest metropolitan area in the region in order to find the greatest opportunities. The Birmingham area is home to more than 1.2 million people. LendingTree ranked the Birmingham area as one of the least competitive real estate markets in the country. There were more potential buyers than sellers, forcing many would-be home owners to rent instead.

5. It Is Landlord Friendly

No one wants to buy rental real estate in a market where it is almost impossible to evict a tenant for nonpayment. Birmingham AL real estate is attractive in part because of how landlord friendly the area is. Alabama passed laws in 2014 that made things more favorable to landlords. Proposed 2018 legislation would make it easier for landlords to make tenants have to leave if they breached their lease contract.

6. Birmingham Is a Low Tax Haven For Real Estate Investors

While federal tax rates may change under the Trump administration, the reality is that state and local taxes are one of the biggest deciding factors real estate investors need to consider. Alabama has some of the lowest property tax rates in the nation. In 2017, Alabama’s effective tax rate was 0.48% and the average property tax bill was only $776.

Birmingham ranked #2 for lowest property taxes. Many people are wondering how the newly instituted tax reforms by the United States Congress is going to affect them. Click on the link to know about the newly introduced “The Tax Cuts and Jobs Act” and its impact on capital gains tax on real estate.

7. Long Term Growth Is Solid

Birmingham AL real estate values are going up. For example, there was a 2014 median price increase of 12.8%. The current 3-year appreciation forecast of 10.6%. Note that this is simply appreciation of the asset’s value, not return on the investment in the form of rent. Capitalization rates up to 15.0% are being seen. Median rent in the Birmingham metro area rose 3.5% between 2000 and 2015.

8. Birmingham Is Now on the Map for All the Right Reasons

Dark history aside, Birmingham is an up and coming real estate market, and it is becoming a name for itself for all the right reasons. For example, it was winner of the 2021 World Games. And Birmingham was voted the number one up and coming food city by Zagat voters in a national survey.

9. The Rental Pool’s Incomes Are Rising

Alabama is seeing an increase in incomes and the skills of its privately employed sector. Birmingham is attracting jobs in law, medicine, nursing & engineering. For example, Autocar and Mercedes Benz are investing more than a billion dollars in Birmingham, bringing high paying jobs to the area.

Unemployment has been below for years 5%. As people move to the area in search of work, they often find themselves renting because of how hard it is to find a home. This is one reason why Birmingham AL real estate is the 8th Hottest Housing Market for 2014 (CNN/Money).

10. The Market Is Stable

It is easy to get caught up in the excitement about a real estate market that is going up; that’s why California and Arizona had insane housing price increases before crashing in the 2007-2008 collapse. One of the benefits of the Birmingham AL real estate market is that it is incredibly stable and steady, and investors can purchase Birmingham investment properties for $80,000 to $100,000.

This make it a prominent place for new investors to get their feet wet and for anyone searching for a good investment that can create stable monthly rental income. It is seeing faster than average appreciation, but it has never been subject to the wild swings that have hit the coasts or other “hot” markets. For example, a quarter of its population is made up of Millennials, and they’re buying an increasing number of homes.

They bought almost a quarter of all homes in the area in 2013, and that ratio is only going to rise. Conversely, this means that you know there are buyers for homes when sold by downsizing Baby Boomers. If you buy Birmingham AL real estate, you know you’ll be able to sell it for what you paid for it if not get a little bit more.

Birmingham Real Estate Investment

Maybe you have done a bit of real estate investing in Birmingham, AL but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. If you are a home buyer or real estate investor, Birmingham real estate investment definitely has a track record of generating one of the best long term returns in the U.S. through the last ten years. If you invest wisely in Birmingham real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.

Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Birmingham, AL.

How Is Birmingham Real Estate Investment?

  • Winner of the 2021 World Games.
  • Law, medicine, nursing & engineering.
  • Capitalization rates up to 15.0%.
  • Ranked #2 for lowest property taxes.
  • 2014 median price increase of 12.8%.
  • 3-year appreciation forecast of 10.6%.

Buying an investment property is different from buying an owner-occupied home. Our Birmingham investment properties are designed to make money as rentals, which means you must look at it solely as an income producing entity just like any other business. These are “Turnkey Cash Flow Investment Properties” located in some of the best neighborhoods of Birmingham.

Birmingham Investment Properties For Sale ⇐ Click Here

Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments.

According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.

We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in various growth markets. We can help you succeed by minimizing risk and maximizing profitability. You can contact us for a Free Strategy Session by clicking here.

Other Best Places To Invest In Real Estate

Another market that we suggest is the housing market in New Orleans, LA. New Orleans real estate investment offers a good combination of short-term renters like students and tourists and a permanent population of renters who cannot afford to buy homes. Geography and market forces limit housing supply, keeping home values and rents stable.

The average home price in the New Orleans housing market is $180,000. That alone makes it affordable compared to other large cities. One of the unique features of New Orleans is how many older homes it has. This does not just create a distinct architectural look and cultural atmosphere.

It means that there are many older homes for sale. For example, in Orleans Parish, roughly two fifths of all homes were built before the 1950s. These homes may be harder to maintain, but they also tend to be affordable and in walkable communities that newer residents desire. It also opens the door to investors buying homes in dire need of repair at a discount, fixing it, and then renting it out.

Another market that we suggest is the housing market in Wilmington, NC. The Wilmington real estate investment is stable, slowly growing and not going to see a change in the demand for rental properties any time soon. Several factors contribute to rents being higher than you’d expect given the average wages and property values, increasing the ROI on Wilmington rental properties. Furthermore, there are several niches you can explore to achieve even higher returns, depending on the market you’d like to serve.

The economics of Wilmington, North Carolina will keep demand for rented-out Wilmington investment properties high. The average household income here is around 50,000 a year, while the average home price is around 260,000. However, home prices are going up at around 6 percent a year while wages are increasing at around 1 percent a year.

This is making home prices less and less affordable for potential home-buyers in the Wilmington NC real estate market. That will drive demand for rental properties. Yet the large student population will compete with long-term residents for rental space, keeping rents high.

Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here. 

One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.


*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

REFERENCES:

Alabama property tax rate
https://www.usatoday.com/story/money/personalfinance/2017/04/16/comparing-average-property-taxes-all-50-states-and-dc/100314754

Landlord friendly laws
https://www.al.com/news/mobile/index.ssf/2018/03/post_141.html?__vfz=rtw_top_pages%3D2480300011984

Lending Tree least competitive real estate market, lots of prime credit ubyers
https://patch.com/alabama/birmingham-al/birmingham-one-countys-least-competitive-housing-markets

Mercedes-Benz and Autocar jobs
http://www.madeinalabama.com/assets/2017/10/2018-Economic-Development-Guide.pdf
cheapest real estate / cost of living
https://www.cnbc.com/2017/05/17/states-with-cheapest-cost-of-living-in-america.html

Zagats
https://www.zagat.com/b/8-must-try-restaurants-in-birmingham-alabama

Median home cost – Birmingham Dallas comparison
https://www.bestplaces.net/cost-of-living/birmingham-al/dallas-tx/50000
cheap suburb housing
https://www.movoto.com/guide/birmingham-al/affordable-birmingham-suburbs/

Millennials buying homes
http://www.builderonline.com/money/top-10-markets-attracting-millennial-buyers_o

Median rent rose 3.5% between 2000 and 2015
https://www.al.com/news/birmingham/index.ssf/2017/01/more_than_half_of_birmingham_a.html

Highest Appreciating Neigborhoods                                                        https://www.neighborhoodscout.com/al/birmingham/real-estate

Market Data, Trends and Statistics
https://www.zillow.com/Birmingham-al/home-values
https://www.movoto.com/birmingham-al/market-trends
https://www.trulia.com/real_estate/Birmingham-Alabama
https://www.littlebighomes.com/real-estate-birmingham.html
https://www.neighborhoodscout.com/al/birmingham/real-estate
https://www.redfin.com/city/1823/AL/Birmingham/housing-market
https://www.realtytrac.com/statsandtrends/al/jefferson-county/birmingham


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