2023 Housing Market Overview for Real Estate Investors

Birmingham Real Estate Market 2023

Learn trends and real estate statistics about the Birmingham real estate market to determine if it’s a strong place for your next single family or multi family home investment.

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    Birmingham Real Estate Market Trends and Statistics for Real Estate Investors 2023

    Birmingham, Alabama Housing Market Trends & Statistics 2023
    The Birmingham-Hoover metropolitan area has seen considerable economic growth in the last decade. Birmingham’s economy is well-diverse, with heavy investments in sectors such as banking, healthcare, education, manufacturing, and telecommunications. Based on the area’s competitive salaries and relatively low living costs, Greater Birmingham consistently ranks among America’s most desirable places to work and earn a living. There are several factors that make Birmingham a favorable place for property investors in 2022. Among them are its affordable home values, passive income potential, and overall market stability over the last few years. The tabs above provide more information about housing market trends, population, and employment rates in Birmingham.

    Data Sources:

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    In this section, we’ll discuss the median home value and rents in 2023 and over the last seven years. These trends are important for real estate investors to understand affordability and equity growth opportunities in Birmingham.

    Home prices in many Birmingham neighborhoods are below the national average.​

    Median Home Value

    Birmingham vs United States

    The data in this chart is based on the average single family home in Birmingham and the United States as of December 2022. 

    Birmingham’s home values are lower than many other U.S. markets. The average Birmingham home is priced at $238,514.86 in 2022, about 30% less than the national average. This shows that homes in Birmingham are comparatively more affordable than properties in other parts of the country. Birmingham has an annual price-to-rent ratio of 14.8, according to RealWealth.

    Greater Birmingham also has a 0.56% rent-to-value ratio, about 1% lower than the national average. If you are not familiar with the metric, the rent-to-value ratio is a percentage that is calculated by dividing the potential monthly rental income from a property by the purchase price. In general, a higher rent-to-value ratio is better, with a rate of 0.7% or higher being ideal. Across RealWealth neighborhoods, the average home value is $137,000, 60% lower than the national average, and the RTV ratio is 0.84%, about 47% higher than the national average.

    Birmingham rents are affordable compared to many markets around the nation

    Median Monthly Rent

    Birmingham vs United States

    The data in this chart is based on the average single family home in Birmingham and the United States as of December 2022. 

    According to RentCafe, about 54% of the households in Birmingham are renter-occupied. The average rental price of homes in Birmingham in 2022 is $1,341. Rent in Birmingham is also affordable, 32% less than the national average. Although rents are still going up in the country, Birmingham remains relatively affordable. Birmingham’s price-to-rent ratio of 14.8 makes renting more affordable than buying, bolstering rental demand. Investors backed by a good real estate team can expect to make a fair return on investment from rental income alone in a few years.

    Birmingham has been appreciating at a steady rate

    Median Home Value (2014-2022)

    Birmingham vs United States

    +74%

    8-YEAR EQUITY GROWTH

    12%

    BELOW NATIONAL AVG.

    The rental market in Birmingham is more consistent than a lot of other markets in the United States. This makes investments in Birmingham less risky and significantly reduces the chances of prices suddenly declining. However, it also means that equity growth is slightly slower for homes in Birmingham. In the Birmingham metro area, the average home has appreciated by 74% since 2014. This yields an average yearly appreciation rate of 8.22%. Homes in Birmingham are appreciating slowly but steadily.

    Birmingham rents have also been rising rising.

    Median Monthly Rent (2014-2022)

    Birmingham vs United States

    +37%

    8-YEAR RENT GROWTH

    9%

    BELOW NATIONAL AVG.

    Monthly rent prices in Birmingham have increased by a total of 37%, since 2014. Although this is 8% less than the national average appreciation rate, it is worth noting that Birmingham properties have a considerable rent-to-value ratio, especially in RealWealth neighborhoods. The average apartment rents for $1,341.43 monthly, 32% less than the national average. Consequently, these properties have a higher chance of yielding a positive return on investment for landlords, while still being affordable to renters.

    Birmingham Population Trends

    One of the most promising signs of a strong real estate market is population growth. In this section, we’ll discuss what’s happening in the Birmingham metro in that area.

    Birmingham's population has been growing at a steady rate.

    Population Growth

    Birmingham Metro Area

    5%

    CHANGE 2010-2021

    32%

    BELOW NATIONAL AVG.

    The Birmingham-Hoover, Al MSA has experienced consistent population growth since 2010 and is currently the largest region in the state of Alabama. By 2023, the population is estimated to reach 1,125,079, despite a slower growth rate than the national average. The increased job opportunities in Birmingham, Alabama is one of the major factors responsible for the population growth.

    Population trends in Birmingham are influenced by Sun Belt migration, a continuing phenomenon from the 90s where Americans move from the Northern States to states in the South and Southwestern region of the United States in search of jobs and more favorable conditions of living. Education is another major driver of population growth in Birmingham. Many well-known universities, including public medical schools such as the University of Alabama at Birmingham School of Medicine and the University of Alabama at Birmingham School of Dentistry, and private institutions such as Samford University and Miles College.

    The city of Birmingham seems to be losing residents to outbound migration, but the metro area is still growing consistently.

    Birmingham Employment Trends

    Another sign of a good place to invest in real estate is a strong economy. In this section, we’ll discuss what’s happening in with jobs in Birmingham.

    Birmingham has been experiencing moderate job growth.

    Job Growth

    Birmingham Metro Area

    18,700

    NEW JOBS 2021-2022

    3.5%

    ANNUAL GROWTH
    The job growth rate in the Birmingham metro area increased by almost 3.5% from May 2021 to May 2022, with 18,700 new jobs being created for Birmingham residents. Birmingham has the highest per capita concentration of healthcare jobs nationwide. The online retail giant Amazon also plans to expand its footprint in the area, creating new job opportunities for residents.

    Major employers in Birmingham

    Birmingham major employers

    Why Invest in the Birmingham Housing Market Today

    In this section, we’ll recap what we’ve covered above in terms of Birmingham’s housing market trends, population trends and employment trends to help you understand what makes Birmingham a strong place to invest in 2023.

    Affordable Real Estate

    Homes in Birmingham are affordable, compared to the rest of the country. The average value of Birmingham homes was recently valued at $238,514.86 for the first seven months of 2022, about 30% less than the national average. Homes can be purchased for less than 150k in Birmingham neighborhoods like FultonDale and Pleasant Grove.

    High Economic Growth Potential

    A survey by Thumbtack ranked Birmingham as one of the top cities for millennial entrepreneurs due to its friendly local tax laws, and regulatory environment, as well as the numerous opportunities for training and networking. This is expected to continue as more tech companies flock to the area. Startups such as grocery delivery services and health companies are launching and flourishing in Birmingham, bringing new life and economic potential to the area.

    Among the Best Cities for Job seekers

    According to the U.S Bureau of Labor Statistics, the unemployment rate in Birmingham is at 2.8%, significantly less than the national average of 3.7 percent. In the past year, Birmingham has added about 16,000 jobs. The University of Alabama at Birmingham is the largest employer in the area by far. Other large employers include the United States government, Regions Financial, Compass Bank, Honda Manufacturing of Alabama, Brookwood Baptist Health and Alabama Power Company.

    Steady home appreciation rate

    The Birmingham property market is appreciating steadily, at a significant rate of 8% per year since 2014. Homes are rising in price as supply fails to meet demand. It is also fair to say that the housing market is fairly competitive, with homes moving fast and often selling above the list price.

    High student population

    The University of Alabama at Birmingham (UAB) ranks 15th in federally funded research among public universities. Birmingham also has two-year colleges: Jefferson State and Lawson State. This makes for a sizable student population driving property demand. Homes situated near schools are especially valuable and are usually priced accordingly.

    Slow but steady population growth

    Birmingham has seen less population growth in recent years, but the number of residents is still on the increase. The new developments in the area are bound to attract more migrants looking to move to the Sun Belt.

    Newsworthy Building and Developments in Birmingham

    Planned developments can help you as an investor to estimate how the value of your investment property might change in the future. Here are some notable projects in the works in Birmingham right now:

    20 Midtown Phase III

    20 Midtown is a long-awaited mixed-use development between Southside and downtown Birmingham. 20 Midtown will include 312 residential apartments, ranging from 400 square feet to 1700 square feet, in its third phase. This five-story building will span an entire city block between 20th Street South and 3rd Avenue South once completed. This project was completed in late 2022. This new development is a very promising sign for real estate investors of all types!

    City Walk BHAM

    With the reconstruction of the I-59/20 interstate bridges, the 31-acre area underneath has received new focus and is being developed into a public space that connects all of Birmingham. Visitors and residents can gather in the linear park, which includes a walking trail and sports fields. This development will span 10 city blocks from 15th Street North to 25th Street North and will make various amenities and facilities available for public use once fully open. City Walk Bham will include several features such as a recreational sports space, a regional skate park facility, a performance space, an amphitheater, a dog park, pickleball courts, an outdoor space, and public restrooms. The skate park and roller rink are currently open and there are also plans for a dog park and a beer garden in the area.

    Tower on Tenth/Building Trades Tower

    Tower on Tenth/Building Trades Tower

    The Tower on Tenth, formerly the Building Trades Tower, is a 12-story residential building located in Five Points South. The building has been vacant since a fire in October 2015. Restoration Capital Partners LLC, the new owner of the building, is planning to spend $40 million dollars on restoring the property. The aim is to transform the building into a residential workforce housing development. It will house 242 studio and one-bedroom apartments. It will feature a billiards area, a gym with on-demand classes, app-based security, and a Starbucks in the lobby.

    Protective Stadium Birmingham

    Protective Stadium

    The Protective Stadium is owned and operated by the Birmingham-Jefferson Civic Center Authority. In exchange for naming rights, financial services company Protective Life will pay one million dollars per year for 15 years. The stadium has a capacity of 47,100 and it hosted the opening and closing ceremonies of the 2022 World Games. It also serves as the home field for the UAB Blazer football team.

    Metro Population
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    Median Household Income
    $ 0 K
    Unemployment Rate
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    Median Home Price
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    Median Monthly Rent
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    Available Properties & Data Gallery

    Birmingham Alabama Sample Single Family Investment Property
    Birmingham Alabama Sample Single Family Investment Property
    Birmingham Alabama Sample Single Family Investment Property
    Birmingham, Alabama Housing Market Trends & Statistics 2023
    Birmingham Alabama Sample Single Family Investment Property
    Birmingham Alabama Sample Single Family Investment Property

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