Montgomery Alabama Real Estate Market is hot. It is a good cash-flow market due to the strong demand for rental housing. And this is not entirely due to the 8 or more colleges and universities in the city. The cost of living in Montgomery is lower than the U.S. average while there are a number of good-paying jobs in the area.
Montgomery has seen the job market increase 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 in and invest in real estate.
Montgomery Housing Market Quarterly Report Q3 2023
Overview of Residential Sales
According to the quarterly report published by the Alabama Center for Real Estate (ACRE), in the third quarter of 2023, Montgomery experienced a notable shift in its residential real estate landscape. The total residential sales for this period amounted to 1,175 units. However, this figure reflects a 22.6% decrease compared to the same quarter in 2022 when 1,518 units were sold.
Sales Performance in Historical Context
When evaluating the data against historical trends, it becomes evident that the third-quarter sales are 25.3% below the 3-year quarterly average and 20.5% below the 5-year quarterly average. This dip raises important questions about the factors influencing the current market dynamics.
Median Sales Price Trends
The median sales price in Montgomery during the third quarter of 2023 witnessed a significant uptick, reaching $238,272. This represents a 6.8% increase compared to the third quarter of 2022, where the median sales price stood at $223,000.
Median Price Performance Over Time
Examining historical data reveals that the third-quarter median sales price is 14.4% above the 3-year quarterly average and 25.9% above the 5-year quarterly average. This surge raises intriguing questions about the factors driving the appreciation in property values within the region.
Average Sales Price and Market Trends
The average sales price in Montgomery for the third quarter of 2023 was $256,850, marking a 3.2% increase from the third quarter of 2022, where the average sales price was $248,837.
Days on Market
One notable metric that shifted in the third quarter of 2023 is the average number of days on the market, which increased by 17.6% from 47 days in the third quarter of 2022 to 56 days.
The inventory of residential units available for sale in Montgomery during the third quarter of 2023 increased by 12.8% compared to the same period last year. This rise suggests a changing landscape in terms of supply and demand within the market.
Months of Supply Calculation
Analysts often gauge the health of a real estate market by examining the relationship between inventory and sales. The quarterly average of inventory for sale divided by the current quarterly sales average equals the number of months of supply. In a balanced market, this figure is typically around 6 months.
- Decrease in Sales: The 22.6% decrease in residential sales raises concerns about the market's overall health.
- Median Price Appreciation: While sales declined, the median sales price witnessed a substantial increase, suggesting a potential shift in buyer behavior or preferences.
- Inventory Growth: The uptick in available units indicates a changing dynamic in the balance between supply and demand.
Overall, the Montgomery Residential Q3 Quarter Report highlights both challenges and opportunities within the local real estate market. Stakeholders, including buyers, sellers, and investors, should closely monitor these trends for informed decision-making.
Montgomery Alabama Housing Market Forecast 2023 & 2024
The Montgomery housing market, as per Zillow's latest data through October 31, 2023, indicates an average home value of $137,270, reflecting a 2.7% increase over the past year. Notably, homes in Montgomery typically go pending in a remarkably swift 15 days.
Zillow's metrics reveal a 0.996 median sale to list ratio as of September 30, 2023, indicating a balance between listing and sale prices. Moreover, 26.4% of sales transacted over list price, while 51.0% were under list price during the same period, suggesting a varied market with opportunities for both buyers and sellers. The median days to pending as of October 31, 2023, stand at 15 days, further emphasizing the fast-paced nature of the local real estate market.
Montgomery MSA Housing Market Forecast
Looking ahead, the Montgomery Metropolitan Statistical Area (MSA) housing market forecast for 2023 and 2024, based on Zillow's projections, is as follows:
- Base Date: September 30, 2023
- 31-10-2023: 0% change
- 31-12-2023: -0.1% change
- 30-09-2024: 0.4% change
The Montgomery Metropolitan Statistical Area (MSA) encompasses a region that extends beyond the city limits and includes surrounding communities. In this context, Montgomery, AL, serves as the focal point of economic and social activities. The housing market within the MSA is of considerable significance, with the average home value acting as a key indicator of the region's economic health.
The Montgomery MSA comprises various counties, each contributing to the overall dynamics of the housing market. The specific counties included in the MSA contribute to the diversity of the real estate landscape, impacting factors such as housing demand, supply, and overall market trends. A comprehensive understanding of these counties is crucial for anyone looking to navigate the Montgomery housing market effectively.
Investing in the Montgomery Real Estate Market: A Comprehensive Analysis
1. Population Growth and Trends
Montgomery's population growth and trends play a pivotal role in assessing the city's real estate investment potential. The city has experienced steady growth, with a burgeoning population that signifies a demand for housing. This sustained growth is indicative of a robust real estate market with opportunities for both short-term and long-term investments.
2. Economy and Jobs
- Diverse Economy: Montgomery boasts a diverse economy, with sectors such as manufacturing, healthcare, and government contributing significantly. A diversified economy is a positive indicator for real estate investors, providing stability and resilience against economic downturns.
- Job Opportunities: The presence of various industries translates to ample job opportunities, attracting a steady influx of residents. Low unemployment rates and job security contribute to a stable housing market, making Montgomery an attractive destination for real estate investments.
3. Livability and Other Factors
Montgomery's livability, including factors such as education, healthcare, and cultural amenities, adds value to its real estate market:
- Educational Institutions: Presence of reputable schools and higher education institutions enhances the city's appeal, attracting families and students, thereby supporting a consistent demand for housing.
- Healthcare Facilities: Access to quality healthcare is a key consideration for residents. A well-developed healthcare system contributes to the overall attractiveness of Montgomery for potential investors.
- Cultural Amenities: A vibrant cultural scene, including museums, parks, and entertainment options, contributes to the overall quality of life. This factor is vital for attracting a diverse range of residents, positively influencing the real estate market.
4. Rental Property Market Size and Growth
The rental property market in Montgomery is of significant interest to investors:
- Steady Demand: With a growing population and a diverse economy, the demand for rental properties remains robust. Investors can capitalize on this demand, especially considering the city's appeal to young professionals and families.
- Market Size: The size of the rental property market provides ample opportunities for investors to diversify their portfolios. From single-family homes to multi-unit complexes, Montgomery offers a range of options to suit various investment strategies.
- Growth Potential: Projections for the rental market's growth indicate a positive trajectory. Factors such as job opportunities, educational institutions, and the city's overall attractiveness contribute to sustained growth in the rental sector.
5. Other Factors Related to Real Estate Investing
Additional factors that make Montgomery an attractive destination for real estate investment include:
- Affordability: Montgomery's relatively affordable housing market compared to national averages is a key factor for investors seeking attractive entry points and potential returns.
- Infrastructure Development: Ongoing and planned infrastructure developments can enhance property values and contribute to the overall growth of the real estate market.
- Investor-Friendly Regulations: Understanding local regulations is crucial for real estate investors. Montgomery's investor-friendly environment, coupled with clear regulations, supports a favorable investment climate.
Considering the population growth, economic stability, livability factors, the size and growth of the rental market, and other favorable conditions, investing in the Montgomery real estate market presents a compelling opportunity for investors looking for a dynamic and potentially lucrative market.