Huntsville AL Housing Market REPORT
If you are looking at buying a house in Huntsville AL real estate market as a potential investment opportunity, you must read till the end. Huntsville is the county seat of Madison County and the largest city in Alabama. The 2020 census estimated Huntsville's population at 215,070, which represents a 20% increase over the 2010 census. More than 1.2 million reside in the Huntsville metro area.
The Huntsville Metropolitan Statistical Area is a metropolitan statistical area on the northern border of Alabama. The metro area's principal city is Huntsville and consists of two counties: Limestone and Madison. Huntsville has the nickname “Rocket City” for its close ties to NASA. Huntsville, AL, known as ‘The Rocket City’, has seen some great progress in various areas of the city in recent years. Let us take a look at the market data from various sources so that you can stay up-to-date with trends in the Huntsville AL real estate market.
Huntsville Residential 1st Quarter Report 2022 published by ACRE shows that residential sales for the first quarter of 2022 totaled 1,883 units, representing a decrease of 4.4% when compared to 1,970 units that were sold in the first quarter of 2021. The median selling price in Huntsville for the first quarter of 2022 was $322,314, a 21.8% increase from one year ago.
Huntsville residential units available for sale in the first quarter of 2022 decreased by 4.6% when compared to the same period last year. The quarterly average of inventory for sale divided by the current quarterly sales average equals the # of months of supply which was 0.9 months, down 23.8% YoY.
Huntsville-Madison County Housing Market Trends 2022 (Monthly)
Huntsville area (Madison County) is facing a shortage of housing supply to meet the growing demand. Here are statistics published by the Alabama Center for Real Estate for the month of April 2022.
Median Price: The median sales price in April was $334,700, an increase of 18.3% from one year ago and an increase of 0.5% from March based on 778 home sales. Homes sold in April averaged 8 days on the market (DOM), 5 days faster than April 2021.
Housing Sales: According to ValleyMLS.com, April home sales in the Huntsville area increased 5.1% year-over-year (Y/Y) from 740 to 778 closed transactions. Sales decreased 0.9% from March. Sales are down 1.8% year-to-date.
Inventory: April listings (722) increased 7.4% from March and 40.7% from one year ago. At the current sales pace, all the active inventory on the market would sell in 0.9 months, an increase from 0.7 months in March and up from 0.6 months in April 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.
Forecast: April sales were 26 units, or 3.4%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 752 sales for the month, while actual sales were 778 units. ACRE forecast a total of 2,736 sales in the area year-to-date, while there were 2,661 actual sales through April, a difference of 2.7%.
New Construction: The 235 new homes sold represented 30.2% of all residential sales in the area in April. Total sales increased 7.3% year-over-year. The median sales price in April was $363,900, a decrease of 0.6% from March and an increase of 21.3% from one year ago.
Huntsville Alabama Housing Market Forecast 2022
Appreciation rates for homes in Huntsville have been tracking above average for the last ten years, according to NeighborhoodScout's data. The cumulative appreciation rate over the ten years has been 59.39%, which ranks in the top 50% nationwide. This equates to an annual average Huntsville house appreciation rate of 4.77%.
Looking at just the latest twelve months, Huntsville's appreciation rates continue to be some of the highest in the nation, at 23.79%. Based on the last twelve months, short-term real estate investors have found good fortune in Huntsville. Huntsville appreciation rates in the latest quarter were at 8.63%, which equates to an annual appreciation rate of 39.26%.
The current housing demand: According to Realtor.com, in April 2022, the median listing home price in Madison County, AL was $323.2K, trending up 24.3% year-over-year. The median listing home price per square foot was $154. The median home sold price was $349.5K. Homes in Madison County, AL sold for approximately the asking price on average in April 2022.
There are 16 cities in Madison County where Realtor.com has active listings. Brownsboro has a median listing home price of $596.9K, making it the most expensive city. New Hope is the most affordable city, with a median listing home price of $225K. Huntsville City's median listing price is $315K, trending up 16.7% year-over-year.
According to Zillow.com, the typical home value in Madison County is $303,661. Madison County home values have gone up 20.7% over the past year and 85% over the past decade (since May 2012). Similarly, the typical value of homes in the Huntsville Metro housing market is $295,602, up 26.7% over the past year and 83.6% over the past decade.
Here are some of the best neighborhoods in Huntsville to invest in real estate because they have the highest appreciation rates since 2000 (List by Neigborhoodscout.com).
- Redstone Arsenal
- Twickenham / Old Town
- Longwood / Mayfair
- Five Points
- Downtown Huntsville
- Mountain Brook
- West Huntsville
- Darwin Downs / Oak Park
- Fleming Meadows
- Terry Heights
Huntsville Real Estate Investment Overview
Investing in real estate is touted as a great way to become wealthy. Is Huntsville rental property good for investment? Planning to invest in the Huntsville, AL real estate market? Many real estate investors have asked themselves if buying a property in Huntsville is a 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 Huntsville housing market forecast for answers on why to put resources into this sizzling market. According to Homefacts statistics, there are 46 public schools in Huntsville with an average Homefacts rating of B-. The total crime rate for Huntsville is high, and there are 215 registered sex offenders residing in the city. Here are the top reasons to invest in Huntsville real estate.
Demographic Momentum
A housing market is stable if the population is stable in both numbers and buying power. Its long-term outlook depends on birth rates, death rates, and migration rates. If young people are leaving for work, then in a few years, the housing market will start to decline. If people are moving into the area because of work, the housing market will see stronger growth unless the housing supply is growing just as quickly.
Huntsville has a population several years younger than average, and a disproportionate number of households here have children. Given the area’s strong economy, they’re seeing people move in for work and their children staying. That alone bolsters the Huntsville Al real estate market long-term.
The Strong Economy
Huntsville’s strong economy also explains why Huntsville’s population growth has been growing about 5% between 2010 and 2015 while the nation as a whole only grew by 3.2%. Huntsville’s unemployment rate is less than 4%, more than a quarter less than Birmingham’s unemployment rate. During the Great Recession that only ended around 2016, Huntsville was an even better place to be. At the height of the Obama Recession, unemployment in Huntsville hit 9% but was 14% in Birmingham.
According to a study by Stessa, a leading real estate technology service provider, the Huntsville metro area led all U.S. metros in the rate of economic recovery for 2021. Huntsville’s 2.2% unemployment rate, strong employment growth, and steady home sales and building permits landed the community at the top of the list. The study showed that communities with strong employment growth and home sales are driving economic recovery.
Huntsville’s total employment has already returned to pre-Covid levels where the U.S. as a whole is still behind. Huntsville’s population grew over 2% from 2019 to 2020, one of the highest growth rates in the country, fueled by companies adding new jobs and opportunities to the local community.
The Sheer Affordability
Housing affordability may seem like a reason not to invest in Huntsville Al housing. After all, why invest if many can afford to buy? In reality, about 20% of those living in the Huntsville Al real estate market are renting. This is a mix of military personnel, students, and those who cannot afford these relatively affordable homes.
The typical home in Huntsville Metro costs around $295K. Homes cost around $150 per square foot, so a small starter home could cost significantly less. An investor could buy multiple affordable homes to rent out for the price of a median home in a West coast city.
“Rocket City” has long been home to a large high-tech workforce. This has created a demand for luxury homes catering to them. Alabama’s most expensive zip code isn’t a tony neighborhood in Birmingham. No, it is 35213, the community of Mountain Brook. The median home in this community is worth just under half a million dollars.
Yes, that’s rivaling a small condo in New York or a modest single-family home in California, but it is incredibly expensive in a community where the median household income is less than $50,000. This opens up the door to “affordable” luxury home investing, whether buying and flipping or buying to rent out to young executives only planning on staying for a year or two.
The Landlord-Friendly Climate
One perk of the Huntsville Al real estate market is how landlord-friendly the area is. The return on your investment in the Huntsville Al housing market suffers if tenants don’t pay the rent for months and you face a costly battle to evict them. Security deposits are limited to one month rent, but if they have pets, there is no limit on the add-on security deposit for pet damage. There aren’t limits on late fees, though if challenged in court, you’ll lose if they are unreasonable.
Notice to terminate the lease is generally 30 days. If the landlord doesn’t offer to renew the lease, the tenant is legally required to leave. There is a process for eviction that requires at least 17 days but likely longer. If someone violates the terms of the lease, they are limited to four “corrections” after which they can be evicted.
Huntsville's Big Rental Market
Any real estate market with a large number of enlisted personnel is going to be home to many renters since military personnel doesn’t want to become long-distance landlords. Redstone Arsenal located just outside of Huntsville has been home to several departments simultaneously such as the Marshall Flight Center, the Missile Defense Agency, the Army’s Missile Command, and a logistics wing.
That meant there were roughly 2000 permanently stationed personnel and ten times that many civilian contractors working at the site. The Defense Base Realignment and Closure Commission has moved some of these functions elsewhere, such as the ordinance school hosted here for a century moving to Fort Lee in Virginia.
Other functions, such as NASA’s Space Flight Center and Missile Defense wing, remained. This means that the number of military and military contracting jobs has declined but has not gone away. It creates an excellent permanent class of renters for those investing in Huntsville Al housing.
A university is a goldmine for real estate investors since students always rent. There are twelve colleges within fifty miles of Huntsville, Alabama. Alabama A&M, J F Drake State Technical College, and the University of Alabama at Huntsville are located in Huntsville proper. The University of Alabama at Huntsville campus alone puts several thousand renters in the Huntsville Al real estate market.
The average rent for apartments in Huntsville, AL, is between $609 and $1,079 in 2022. For a studio apartment in Huntsville, AL, the average rent is $609. When it comes to 1-bedroom apartments, the average rent in Huntsville, AL, is $887. For a 2-bedroom apartment, the average rent is $1,065. The average rent for a 3-bedroom apartment in Huntsville, AL, is $1,079.
When you factor in the premium charged for the privacy and space you get when renting a home, landlords charge much higher monthly rents for detached single-family homes. When combined with the relatively low price you can pay for properties, this yields a decent return on the investment unless you pay too much at the beginning.
The Growing Technology Research Sector In Huntsville
Huntsville’s early support for the space program resulted in a technology and research park here. Huntsville now has the second largest tech and research park in the United States. This attracts well-paid talent from around the world. Those relocating here for work tend to rent rather than buy since they may go somewhere else in a few years.
Others choose to rent for a while until they find the right home to buy. These high-paying jobs also keep home values high in the Huntsville Al real estate market. Huntsville has leveraged its significant technology base to cultivate a biotech industry. For example, the HudsonAlpha Institute for Biotechnology is but one biotech research facility in the four thousand acres Cummings Research Park.
This research hub rivals Research Triangle Park in North Carolina. It is R&D centers like that that explain why Huntsville has such a well-educated, well-paid population. And given how many researchers move to follow the grants or upgrade their careers, many rent homes instead of buying them. Whether renting or buying, these high-paying biotech workers keep property values and rents high in the Huntsville Al real estate market.
Conclusion
If you invest wisely in Huntsville real estate, you could secure your future. 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. The Huntsville AL real estate market is a solid market with long-term potential that any investor could take advantage of.
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How Is Huntsville Real Estate Investment? |
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Buying an investment property is different from buying an owner-occupied home. Our Huntsville 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 Huntsville.
We can help you succeed by minimizing risk and maximizing profitability. You can contact us for a “Free Strategy Session” by clicking here.
Another housing market in Alabama to go for diversifying your investments is the Birmingham Al real estate market. Birmingham, AL 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 $277K. Birmingham AL real estate values are going up.
Similarly, Montgomery, Alabama is another great market for investing in real estate. Montgomery Alabama Real Estate Market is a strong cash-flow market due to strong demand for rental housing. And this is not entirely due to the 8 colleges and universities in the city. Montgomery has seen the job market increase by 1.1% over the last year. Future job growth over the next ten years is predicted to be 30.3%. With affordable home prices, lower taxes, and a low cost of living, Montgomery is a great city to live and invest in real estate
Let us know which real estate markets you consider best for real estate investing!
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
Market Data & Trends
https://acre.culverhouse.ua.edu/
https://www.zillow.com/huntsville-al/home-values/
https://acre.culverhouse.ua.edu/category/statewide/huntsville-madison-county/
https://www.realtor.com/realestateandhomes-search/Huntsville_AL/overview
https://www.rent.com/alabama/huntsville-apartments/rent-trends
https://www.homefacts.com/city/Alabama/Madison-County/Huntsville.html
https://www.neighborhoodscout.com/al/huntsville/real-estate
Economy & Population growth
https://hsvchamber.org/huntsville-leads-the-u-s-in-2021-economic-growth/
https://www.towncharts.com/Alabama/Demographics/Huntsville-city-AL-Demographics-data.html
Hidden luxury market
https://www.al.com/news/index.ssf/2016/03/how_much_it_costs_to_buy_a_hou_1.html
Landlord Friendly
https://sparkrental.com/alabama-landlord-tenant-law-summary-quick-reference
https://www.alabamalegalhelp.org/resource/alabamas-landlord-tenant-law-is-changing
Universities
https://www.collegesimply.com/colleges-near/alabama/huntsville/
