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the most affordable residential real estate markets in Alabama

What are the most affordable residential real estate markets in Alabama?

Alabama is one of the leading real estate markets. Despite the latest rise in interest rates and inventory level. Moreover, the call for new housing is still on escalation in this area, and houses are also selling at a very fast rate. Which is an indication of consistency and stability in the real estate market in Alabama.

If you are contemplating on buying a house during this summer season, it is wise for you to start by comparing the pricing of housing in Alabama to other areas. It is also critical to compare its pricing to the entire nation.

Below is information of the housing pricing trends in Alabama in comparison to other areas in the nation.

Alabama has a higher Housing Affordability Index than the other areas in the nation. For instance in 2018 Alabama had a Housing Affordability Index of 214.4. Compared to 19.4 percent nation-wide. This particularly means that if you reside in Alabama you have 50% higher chance for qualifying for a house loan. Similarly, persons residing outside Alabama have slightly lower chances of getting mortgage financing. It is however interesting to note that, persons residing in Alabama have slightly lower average family income of $60,200 compared to individuals in other areas with an income of $71,900. Despite the difference in income level per family Alabama is still the ideal market in real estate. This is result of its significantly lower housing rates compared to the other areas in the United States.

Alabama’s Most Reasonably priced Metropolitan Areas

Alabama most reasonably priced Metropolitan Areas are highlighted in the table. The table illustrates Alabama’s cheapest metropolitan areas. The Centre for Business and Economic Research (CBER) at the University of Alabama indicates that these areas are 12 in number namely Tuscaloosa, Anniston-Oxford-Jacksonville, Montgomery, Auburn-Opelika, Birmingham-Hoover, Daphne-Fairhope-Foley, Decatur, Dothan, Florence-Muscle Shoals, Gadsden, Huntsville, and Mobile.

Gadsden in Alabama is an area with the smallest residents, for instance its population was 102,564 in 2016. Apparently the population in this area has been reducing gradually, it is also projected by CBER projects and Census data that the population will drop further by 3.7 in 2030.

Birmingham-Hoover, has the most residents in Alabama with a population of 1,147,417. It is also projected by CBER projects that the population in this area will increase by 7.3 percent by 2030.

Daphne-Fairhope-Foley is fastest-growing metro area in Alabama. It had a population of 208,563 in the year 2016. CBER indicates that the residence of population Daphne-Fairhope-Foley will rise 43.6 percent to 261,777 in 2030.

The cheapest metro areas in Alabama, as indicated by ACRE’s Alabama Housing Affordability Index, include Decatur (238), Anniston-Oxford-Jacksonville (237.9), Florence-Muscle Shoals (236.9), Gadsden (236.1) and Montgomery (225.3). It is however curious that Birmingham-Hoover and Huntsville are not among the five affordable metro areas in Alabama. It is despite the high family income of $78,000 in Birmingham-Hoover and$78,000 in Huntsville. This could be as a result of the rise in pricing of houses. For instance, in average $191,500 in Huntsville and $191,633 in Birmingham-Hoover.

The most expensive areas in Alabama are Daphne-Fairhope-Foley at 156.8 followed by Auburn-Opelika 160.2. . The study revealed that these two areas have individuals with significantly high income compared to the nation level but with houses selling within the 200 range. Case in point, a house in Daphne-Fairhope-Foley will cost you $233,833 while a home in Auburn-Opelika is approximately $220,620. This is a result of high end designs of housing in these areas. For instance, most of them have beaches at close proximity while others are ultra-luxury houses. However, if you compare the affordability index score of these areas to the national wide one it is approximately 155.7.

Alabama’s Most Affordable Non-Metropolitan Areas

The cheapest non-metropolitan areas in Alabama are Talladega County (174), Cullman County (176), Walker County (205.9) Monroe County (216.1) and Marshall County (232.8).

Majority of the residence in Marshall County have a high family income compared to other non-metropolitan areas in Alabama. It is also indicated that the average family income in this area has improved by 22.6 percent since 2017. This can be attributed to the county’s closeness to Huntsville, which is town with vast job opportunities in the north of Alabama. This area is also famous for highly priced housing. Most individuals in this area prefer to buy houses in Marshall County where housing is cheaply priced and travel to Huntsville for work.

Tallapoosa County is the most expensive non-metropolitan in Alabama in addition to the fact that it has a Housing Affordability Index of 133.4. This is slightly lower than the national AHAI of 155.7. The median prices of houses range from $206,333. These houses are also luxurious for instance they have classy water front’s arising from lake Martin. The prices of these homes are determined by the waterfronts. For example a house without a waterfront will cost you $440,833 while houses without waterfronts have a median price of $115,800. The AHAI score for Tallapoosa County without including waterfront is 237.7.

Stuart Norton is the research coordinator at the Alabama Center for Real Estate.

Our main objective in Alabama Center for Real Estate (ACRE) is to be a reserve for Alabama’s real estate municipal by creating relationships and providing satisfactory services with charismatic leadership.

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