The Birmingham real estate market continues to take steps in the right direction in 2016. The second quarter witnessed improvements in home prices and appreciation rates, although both remained slightly below the national average. However, the last three years have seen gains in home prices extend the trend of positive price growth after the recession, helping to benefit both Birmingham real estate investors and homeowners.
Along with homeowners and investors, the real estate market itself has become the beneficiary of impressive growth. What’s more, the Birmingham housing market remains among the most affordable markets in the nation, which bodes well for homeowners, investors and renters alike. That said, the Birmingham real estate market is poised to see continued improvements in the second-half of 2016.
Birmingham, AL Real Estate Market Statistics:
One of the main outliers of a thriving real estate market is home appreciation, or total equity if you will. During the second quarter, Birmingham real estate saw one-year appreciation rates of 1.9 percent, and three-year rates of 12.4 percent. In comparison, those numbers fell short of the national average, which saw a one-year appreciation rate of 4.9 percent, and a three-year rate of 17.8 percent. Nevertheless, the Birmingham real estate market continues to make the appropriate improvements, which should eventually trickle into larger returns for investors and homeowners. For those considering Birmingham real estate investments, the following highlights appreciation rates in previous years:
- Homes purchased in the Birmingham, AL housing market one year ago have appreciated, on average, by $6,861. The national average was $14,963 over the same period.
- Homes purchased in the Birmingham, AL housing market three years ago have appreciated, on average, by $30,638. The national average was $46,878 over the same period.
- Homes purchased in the Birmingham, AL housing market five years ago have appreciated, on average, by $60,422. The national average was $82,353 over the same period.
- Homes purchased in the Birmingham, AL housing market seven years ago have appreciated, on average, by $59,627. The national average was $77,054 over the same period.
- Homes purchased in the Birmingham, AL housing market nine years ago have appreciated, on average, by $50,827. The national average was $31,126 over the same period.
In terms of total equity, Birmingham real estate investors and homeowners saw less favorable returns compared to the national average. Total appreciation for Birmingham real estate has fallen short of the national average for the past nine years. However, homes purchased in 2005 saw total equity gains surpass the rest of the country at $66,636, nearly double the national average of $34,380. Additionally, price appreciation and principle payments in the last three years have boosted total equity growth since the recession.
Another component of the Birmingham real estate market is foreclosures and REO properties. According to RealtyTrac, the number of Birmingham homes in some stage of foreclosure was 3,546 during August 2016. For Birmingham real estate investment purposes, the bump in foreclosures could lead to increased investing activity in the second-half of 2016.
Birmingham, AL: Real Estate Market Summary:
- Current Median Home Price: $195,200
- 1-Year Appreciation Rate: 1.9%
- 3-Year Appreciation Rate: 12.4%
- Unemployment Rate: 6.0%
- 1-Year Job Growth Rate: 1.1%
- Population: 212,113
- Median Household Income: $34,135
Birmingham, AL: Real Estate Market (2016) — Q2 Updates:
The median home price for Birmingham real estate was $195,200 during the second quarter, compared to the national average of $239,167. Although price growth has slowed in recent months, home prices for Birmingham are up from a year ago. In addition, home appreciation for Birmingham real estate remains a shade below the national average, which is positive for investors and homeowners. On the other hand, there are still factors impacting the Birmingham real estate market negatively in 2016.
For one, the local economy in Birmingham needs to improve. The unemployment rate during the second quarter was 6.0 percent, whereas the rest of the country saw unemployment rates of 4.9 percent. Although Birmingham’s unemployment situation is worse than the national average, employment has held up and is on an upward trend. The one-year growth rate for Birmingham was 1.1 percent in Q2, compared to 1.9 percent achieved by the rest of the country.
Another component that could influence the Birmingham real estate market for years to come is new housing construction. The second quarter saw construction for Birmingham real estate reach 31.3 percent above the long-term average, while single-family housing permits rose 12.1 percent, in comparison to the rest of the country at 10.6 percent. That said, construction in Birmingham is on the rise relative to last year, which suggest the local inventory has stabilized.
The signature of Birmingham’s housing market remains home affordability. Homeowners paid 8.9 percent of their income to mortgage payments during the second quarter, compared to the national average which paid 15.8 percent. Although historically strong, the Birmingham housing market is now one of the more affordable housing markets in the nation.
According to the National Association of Realtors (NAR), the Birmingham real estate market is forecasted to see weaker price growth in the next 12 months, with price expectations for Birmingham real estate predicted to grow by 3.3 percent in the second-half, compared to the national average of 3.6 percent. That said, the Birmingham real estate market should continue to improve in the second-half of 2016, which will undoubtedly open the doors to a world of real estate investment opportunities.
