2024 Housing Market Overview for Real Estate Investors
Birmingham Real Estate Market 2024
Get insights about the 2024 Birmingham real estate market to determine if it’s the best location for your next single-family or multi-family investment property.
Birmingham Real Estate Market Trends and Statistics for Real Estate Investors 2024
The Birmingham, Alabama, real estate market offers steady cash flow due to low property taxes, a diverse and stable economy, and minimal investment risk. This makes it ideal for buy-and-hold investors seeking maximum returns.
The Birmingham metro area, also called Greater Birmingham, is located in northern Alabama and is the state’s largest city. It has seven counties: Bibb, Blount, Chilton, Jefferson, St. Clair, Shelby, and Walker. Combined with the Cullman micropolitan area and the Talladega-Sylacauga micropolitan area, this region forms the Birmingham–Cullman–Talladega, AL Combined Statistical Area, the most populous region in Alabama with 1,415,988 residents.
Birmingham is a magnet for millennials, ranking seventh among the 150 largest metro areas for a percent increase in young residents (ages 25-34).
The area attracts millennials because of its robust economy fueled by banking, healthcare, education, and technology. Traditional industries like steel manufacturing and startups like Shipt and Daxko also contribute to Birmingham’s economic stability.
Birmingham’s home prices have risen 78.5% and rents by 40.5% over the last 10 years. This, combined with low entry costs and high renter demand, makes Birmingham a great real estate investment opportunity.
Data Sources:
- www.census.gov
- www.deptofnumbers.com
- www.zillow.com
- RealWealth Property Team Data
- Best Places to Buy Rental Property in 2024
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Birmingham Housing Market Trends
Birmingham boasts a diverse economy, with significant healthcare, finance, and education employers (University of Alabama-Birmingham and Regions Financial Corporation), driving its $79 billion gross domestic product (GDP). Birmingham’s low unemployment rate is just 2.9% and high-paying jobs in healthcare and finance fuel demand for housing.
This section explores Birmingham’s average home value and rents in 2024 and over the last ten years to help investors assess affordability and equity growth potential in the Birmingham real estate market in 2024.
Birmingham home values are more affordable than the national average.
Median Home Value
The data in this chart is based on the average single family home in Birmingham and the United States as of January 2024.
Home values in the Birmingham, AL, real estate market are well below the national average, at $244,942 as of January 2024, which is 30% below the national average. Homes in RealWealth investment areas average $134,500 with a $1,165 monthly rent.
Birmingham metro area home prices vary widely. Mountain Brooks has the most expensive homes at $894,500, while Bessemer is much lower at $163,000 as of March 2024. Affluent suburbs like Homewood ($454,000), Hoover ($450,000), and Vestavia Hills ($515,000) have significantly higher median home prices than the city of Birmingham itself ($199,000).
Birmingham rents are also more affordable than other metros.
Median Monthly Rent
The data in this chart is based on the average single family home in Birmingham and the United States as of January 2024.
Birmingham’s monthly rents averaged $1,372 in January 2024, 31% below the national average, highlighting the affordability of the Birmingham, Alabama, real estate market for renters. With a price-to-rent ratio of 14.9, Birmingham slightly favors buying over renting. The metro area has an average rent-to-value (RTV) ratio of 0.56%, close to the 0.57% national average. RealWealth’s investment areas boast a higher RTV ratio of 0.87%, 52% greater than the national average.
Birmingham’s median rent across all property types and bedroom counts is $1,255 as of April 2024. This is up 7% year over year, reflecting rising demand for rental properties in the Birmingham real estate market in 2024.
Birmingham home values are appreciating steadily.
Median Home Value (2014-2024)
79%
8%
Birmingham home prices have increased by 78.5% over the past 10 years, at 6.65% annually. This appreciation rate lags behind the national average for the same period by 9%. Zillow reports that as of April 2024, the average home value in the city was down 4.3% over the past year. According to Zillow, Birmingham’s average home value is $132,847.
Interest rates will impact the Birmingham real estate market in 2024. Experts predict that lower rates coupled with low inventory could boost sales and put upward pressure on prices, making it an opportune time for those looking to purchase single- and multifamily investment properties.
Birmingham rents are also rising at a steady rate.
Median Monthly Rent (2014-2024)
41%
2%
Birmingham’s average monthly rent has grown by 40.5% over the last decade, at 3.58% annually. This is just 2.3% slower than the national average for the same period. From March 2020 to October 2023, Birmingham rents jumped 25.2% to an average of $1,294 monthly, the highest growth among Alabama’s top three metros.
Birmingham’s apartment supply grew from 69,341 to 72,417 units during this period, and occupancy rates remained high at around 94%.
Birmingham Population Trends
Birmingham's population has been growing at a steady rate.
Population Growth
5%
33%
Birmingham’s metro area grew slowly by 5.19% over the twelve years from 2010 to 2022. This population growth rate, equivalent to 0.51% annually, lags the national average by 32.9%. The entire metro area barely budged in terms of population between 2021 and 2022, losing only 185 people. During that same time, seven of Alabama’s 10 fastest-shrinking cities (with over 10,000 residents) were in Birmingham’s core, including wealthy suburbs like Vestavia Hills and Mountain Brook (both were down by 1.3%).
In 2023, the metro area population jumped by almost 65,000 due to a county accounting change that added Walker County back in, making it the 47th most populous metro area in the United States. While Birmingham’s overall metro area population has remained largely stagnant, significant movements within. Cities in Birmingham’s core, like Mountain Brook and Hoover, are losing residents while suburban areas like Calera and Chelsea in Shelby County are growing.
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 is experiencing high job growth.
Job Growth
15,500
3%
The job market in Birmingham is booming. Between November 2022 and November 2023, the metro area added 15,000 new jobs, a 2.79% growth in jobs, 66% greater than the national average. According to the U.S. Bureau of Labor Statistics data for metro areas with populations of over 1 million, this growth rate placed the metro area fourth nationally for job growth last year.
Unemployment in Birmingham is also very low, and the city tied with Miami for the lowest unemployment rate in April 2023. The area is attracting investments and business expansions. Recent developments include Coca-Cola United’s new $338 million headquarters, Consolidated Pipe’s $30 million relocation, and startups like CModel Data and Allison Fintech establishing their presence in Birmingham through the support of the AFF (Alabama Futures Fund).
With major projects also planned or underway at institutions like the Univerisity of Alabama Birmingham and Southern Research, the strong job growth is expected to continue.
Why Investors Should Consider Buying Investment Property in Birmingham
Is Birmingham a good place to invest in real estate? Let’s see what makes the Birmingham metro area one of the best places to buy real estate in 2024.
1. Steady cash flow
The Birmingham, Alabama, real estate market offers affordable homes with a median price of $199,000. This is far lower than the national average, offering investors opportunities for high cash-on-cash returns. In neighborhoods where RealWealth members invest, the average rent-to-value ratio is 0.87%, indicating solid cash flow potential within the Birmingham investment real estate market.
In areas like Hueytown and Pleasant Grove, investors can find new developments with modern amenities, minimizing maintenance costs and attracting tenants willing to pay higher rents.
2. Diverse economy
Birmingham has a well-diversified economy supported by industries like medicine, education, manufacturing and aerospace. Its stable job market fuels consistent rental demand. Major employers like Regions Financial Corporation, Protective Life Corporation, and the University of Alabama at Birmingham solidify the city’s economic strength.
Automakers, such as Autocar’s $120 million investment and Mercedes-Benz’s $1 billion electric vehicle plant, have recently invested in Birmingham, positioning it as an auto industry hub. Beyond its strong economy, the city attracts tourists with attractions such as the Birmingham Museum of Art, the Birmingham Civil Rights Institute, and the Birmingham Botanical Gardens.
3. Low property taxes
Alabama has low property taxes, with homeowners paying just $674 a year in property taxes. That’s only a quarter of the national average of $2,795. Birmingham has a low effective property tax rate of around 0.75% because only 10% of a property’s actual market value is assessed. Birmingham’s total property tax millage rate is 78.6 mills (7.86%).
4. Affordable housing
The city’s affordability attracts renters and investors alike. Several Birmingham neighborhoods offer homes under $100k, including Ensley, Woodlawn, East Lake, and West End. These areas allow you to buy Birmingham investment properties at low prices.
It’s also worth noting that Birmingham’s price per square foot only rose 29% in the last five years, ranking seventh slowest among major metros. This slow appreciation rate makes Birmingham homes affordable for residents and real estate investors.
5. Rising rental demand
Birmingham has a hot rental market. The city is home to universities like Samford and Birmingham-Southern, drawing students and academic professionals. With a new $1 billion investment, downtown Birmingham is being transformed into a vibrant 24/7 entertainment district, which would attract even more residents and renters to the area.
Newsworthy building developments and projects in Birmingham
Planned developments help real estate investors estimate how the value of their investment properties might change over time. Here are some notable projects in the Birmingham real estate market right now.
1. The Tracks
Birmingham is getting a new 273-unit apartment complex on 1st Avenue South near the Rotary Trail called The Tracks. Built by national developer TWG, The Tracks will have five floors containing 273 apartments. It will have amenities like a pool deck, fire pits, grilling stations, gym, a community lounge, bicycle storage, and super-fast internet. The project cost is around $61 million. Photo credit: Fifth Dimension Architecture & Interiors
2. The Star at Uptown Amphitheater
Birmingham is building a 9,000-seat outdoor amphitheater next to The Star development and Protective Stadium in the Uptown entertainment district. The city cleared over 100,000 square feet for the venue on the former 50-acre Carraway Hospital site. The amphitheater is on track to open by Summer 2025. It is part of Birmingham’s plan to revitalize and turn its downtown area into a vibrant entertainment hub.
3. AC & Element Hotel at Brown-Marx Tower
Birmingham’s historic Brown-Marx Tower is getting a modern makeover. Ascent Hospitality, the owner of the Elyton Hotel, wants to convert the 117-year-old skyscraper into a dual-branded hotel. The AC Hotel portion will have 190 rooms catering to business travelers, while the Element Hotel will offer 148 rooms for both short and long-term stays. Photo credit: Nathan Watson / Bham Now
4. Brasfield & Gorrie headquarters expansion
Brasfield & Gorrie, a major construction firm, is investing $18.9 million to expand its headquarters in Birmingham. The company wants to add a 28,500-square-foot, three-story building to its campus at 3021 Seventh Avenue South in Birmingham’s Lakeview District. Founded in 1964, Brasfield & Gorie is a Birmingham-based construction firm that has grown to become a national leader, with over 3,700 employees across 13 offices. Photo credit: Brasfield & Gorrie
5. Edgehill at Southtown
Edgehill at Southtown is a large mixed-use development replacing Birmingham’s Southside public housing community (Southtown Court). Located near the University of Alabama Birmingham, Ascension St. Vincent’s and Southern Research, it aims to boost the city’s medical and biotech sectors. The 26-acre project will include green spaces, shops, restaurants, office spaces (especially for healthcare/biotech firms), and both affordable and market-rate housing. Construction is underway, with the first building, a 60-unit multifamily building with amenities like a gym, playground, and community room, scheduled to welcome residents by October 2024.
Best Places to Buy Investment Property in the Birmingham & Surrounding Metro Areas
If you plan to invest in the Birmingham real estate market in 2024 or 2025, here are some of the best neighborhoods to invest in the city and the greater metro area right now.
1. Center Point
Center Point sits along Center Point Parkway (AL Highway 75), an essential 4-mile route through Birmingham, Center Point, Pinson, and nearby areas. The city is close to major highways, I-59 and Gadsden Highway. Autocar's $120 million investment in opening a truck assembly plant in the city greatly boosted the city. Center Point offers a high quality of life with various shopping options, parks, and recreational facilities. The Center Point Shopping Center, a 148,275-square-foot major shopping center, has established tenants like Food Giant, Oak Street Health, Heaven Cent Thrift and MetroPCS. The city also offers six parks and recreational facilities, including the Center Point Sports Complex and Reed-Harvey Park. It is close to the Ruffner Mountain Nature Preserve, which offers hiking and nature exploration. As of April 2024, the median home price in Center Point is $115,000, making it relatively affordable compared to other areas in the Birmingham metro area.
2. Pinson
Pinson is a growing Jefferson County suburb northwest of Center Point, with a population of around 7,200 as of 2022. Located just a 24-minute drive from Birmingham, Pinson offers more affordable living costs. New construction is flourishing in the area, with communities like Hunter’s Point at Innsbrooke. Pinson boasts natural beauty, with parks like Turkey Creek Nature Preserve featuring over 400 acres of diverse habitats and outdoor recreation opportunities. The city offers easy access to major highways like Hwy 79 and is close to job centers like Trussville, Argo, and downtown Birmingham.
3. Forestdale
Forestdale is a quiet, family-friendly suburb of Birmingham with a low crime rate. Forestdale’s housing market is booming, with home values rising in recent years. As of April 2024, the median price is $192,750, a 34.8% year-over-year jump, suggesting potential long-term investment gains for investors in the area. Forestdale is just a 13-minute drive from Birmingham. It is perfect for commuters, with small-town charm and easy access to the bigger city.
4. Pleasant Grove
4. Pleasant Grove Pleasant Grove offers a tight-knit community with a higher median household income ($69,552) than the county average ($57,007). The city has a population of 9,446 residents and boasts lower crime rates than the state and national averages, making it one of Alabama’s top 10 safest cities. Located just ten miles east of Birmingham, residents enjoy convenient access to jobs, schools, and entertainment spots in the big city while living in a quieter, safer environment. It is close to exciting attractions like the Alabama Adventure & Splash Adventure (an amusement and water park) and Red Mountain Park, making it a great place for families seeking leisure activities.
5. Bessemer/Hueytown
Central Alabama’s Bessemer boasts easy access to major transportation routes thanks to its strategic location, including the Bessemer Municipal Airport (Mitchell Field). Bessemer is also close to Birmingham, Hoover, and Tuscaloosa, which enhances its appeal to logistics companies. The city’s economy is booming, with major companies like Amazon, Steyr Arms USA, BLOX, Milo’s Tea, and Dollar General setting up facilities here to take advantage of the city’s prime location. Recent years have seen significant development activity in Bessemer, including a $325 million Amazon fulfillment center that created 1,500 jobs. Bessemer also boasts exciting attractions like Alabama Adventure & Splash Adventure (an amusement and water park), Autobahn Indoor Speedway and historic Tannehill State Park. Hueytown, a charming neighborhood within Bessemer, is a family-friendly area known for its peaceful streets and strong sense of community.
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