The City of Birmingham has been steadily growing for the past decade and is now the second largest city in the State of Alabama. The population growth is fueled by job growth in key sectors and a lower cost of living than the national average.
The lower cost of living has attracted new businesses and residents to the city. Birmingham is considered an entrepreneurial hub and is home to over 550 technology companies which attract a younger demographic to the city.
Birmingham was named 2015's Best City for Millennial Entrepreneurs by Thumbtack and is ranked in the top 10 cities that have seen an increase in millennial residents (ages 25-34). Young professionals provide a steady stream of potential renters for property investors and managers.
Birmingham's growing, younger population and economic growth have driven the demand for rental properties while supply has lagged. These factors combine to make Birmingham Hoover a hotspot for real estate investing.
Birmingham is located in the foothills of the Appalachian Mountains and has a lot to offer homeowners, renters, and property investors. It's known as the "Magic City" because of its historical and rapid growth. Huntsville only recently surpassed it as Alabama's largest city. Don't let this demotion to Alabama's second city fool you. Birmingham still has a lot to offer.
In Birmingham's property listings, real estate investors can find nearly everything from historic to new homes and single-family to multi-family housing.
The Birmingham Metro Area includes several attractive neighborhoods and suburbs for property investors. These include East Lake, Homewood, Hoover, Huffman, and Talladega.
-East Lake: East Lake is located in the northeast corner of Birmingham. It's home to Ruffner Mountain and is a primarily residential neighborhood. East Lake's median listing price is just $88/sqft, which makes it one of Birmingham's more affordable neighborhoods. -Homewood: Homewood is a suburb of Birmingham located just south of the city center. Like East Lake, Homewood is a primarily residential neighborhood that attracts young families. However, its house prices aren't as affordable as East Lake. The median listing price in Homewood is $272/sqft. -Hoover: Hoover is another suburb south of Birmingham. It's located along the intersection of interstates 65 and 459. It's north of Oak Mountain State Park and home to Aldridge Gardens and many golf courses. Hoover's median listing price is $166/sqft, and the median rent is $2,190/month. -Huffman: Huffman is a suburb of Birmingham that attracts young professionals. It's located to the northeast of Ruffner Mountain and southwest of Trussville. The median listing price in Huffman is $103/sqft, and the median rent is $1,250/month. -Talladega: Talladega is the county seat of Talladega County and is located about 50 miles east of Birmingham city center. It's known for motorsports and is home to the Talladega Superspeedway. Its population has been growing as people move out of Birmingham, looking for a slower pace and more room. The median listing price in Talladega is just $94/sqft, and the median rent is $966 for a single-family rental home.
A few other areas of note are Smithfield, a historical neighborhood key during the Civil Rights Movement; Ensley, a historical neighborhood once considered the "heart and soul" of Birmingham's social scene with now new plans for redevelopment; Mountain Brook, a small suburb nestled in the mountains with big city energy. No matter your taste, Birmingham has something for everyone.
The Birmingham rental market presents tremendous investment opportunities. Demand outpaces supply while property values continue to increase and home values remain affordable. This trend has been steady in Birmingham for over a decade.
The average price of a home in Birmingham is $170,000. Home values have increased by 23% since last year. The national average home price growth is 18.8%.
The Birmingham property market remains strong due to the city's sustained economic and population growth. The rental market remains strong due to the inbound migration of young professionals to the city. They provide an opportunity for property owners and property managers to earn rental income.
Birmingham has consistently ranked among the top cities for economic growth in the U.S. Its job growth in various industries and low cost of living make it an attractive destination for young professionals and real estate investors. Birmingham's top industries are world-class healthcare, insurance, higher education, banking, and manufacturing. The largest employers include Encompass Health, Blue Cross Blue Shield of Alabama, the University of Alabama at Birmingham, Regions Bank, and Vulcan Materials Company.
The cost of living in the Birmingham-Hoover Metro Area is around 2% lower than the national average. Additionally, five interstates run through the city, which makes it easy for commuters to travel to and from work.
Historically, Birmingham is known for its pivotal role in the Civil Rights Movement. Today, the city is a hotspot of opportunity for everyone, including real estate investors who want to take advantage of affordable property prices and earn rental income.