Huntsville Investment Property for Sale - 2024 Rental Home Appreciation

State: Alabama


Huntsville, Alabama, is a National Association of Realtors 2022 Hidden Gem for real estate investment opportunities. Huntsville is listed as a "hidden gem" because it has experienced the highest 3-year gain in property values in the U.S. while its job and population growth continue to outpace national rates.

The Huntsville area has been steadily growing for the past decade. In just the last four years, Huntsville has passed Montgomery and Birmingham to become Alabama's largest city. This growth is fueled by Huntsville's growing technology hub and lower cost of living.

The rapid population growth has positively impacted Huntsville's real estate market. The average sales price of single-family homes in Huntsville has increased by $100,000 in the last two years. The median listing price is $148/sqft, and home prices will likely go up as demand continues to outpace supply.

Huntsville's trifecta of property values, jobs, and population growth gives it tremendous profitability potential for real estate investors.

Huntsville's Attractive Housing Market

The Huntsville real estate market is booming. The growing job market and lower cost of living drive population growth and demand for rental properties, both single-family and multifamily rentals. This demand for housing, combined with lower property tax and increasing home values, makes it an attractive rental market for investors, especially those looking to invest in single-family rentals.

The Huntsville Metro Area includes several attractive locations for real estate investing. These include Decatur, Athens, and Madison.

  • Decatur: Decatur is located along the Tennessee River in Morgan County, southwest of Huntsville. It's known as a "Grand City on a Charming Scale" and has something to offer every prospective renter. The median listing price in Decatur is $121/sqft, and the median rent is $1,270/month.
  • Athens: Athens is in Limestone County, just west of Huntsville. It's home to the Alabama Veterans Museum and Swan Creek Greenway National Recreation Trail. It offers prospective renters a small-town feel with the convenience of a city. The median listing price in Athens is $152/sqft, and the median rent is $1,880/month.
  • Madison: Madison is in Madison County just west of downtown Huntsville and neighbors the Redstone Arsenal and U.S. Space and Rocket Center. Madison is home to Toyota Field and the Rocket City Trash Pandas. It's an attractive city for families. The median listing price is $157/sqft, and the median rent is $1,860/month.

Rental Home Appreciation in Huntsville

The Huntsville housing market uniquely favors renters as well as real estate investors.

Last year, Huntsville was ranked as the 10th hottest rental market in the U.S. Millennials are flocking to the Huntsville-Decatur Metro Area because it offers the perfect combination of lower cost of living and a growing number of well-paying jobs.

The population influx of younger demographics has caused the demand for rental properties to increase while supply slags behind, which is attractive for rental owners and property management companies.

Real estate investors interested in Huntsville shouldn't wait too long. It won't stay a "hidden gem" forever. Home buyers already see the value in this market. The median sales price for Huntsville homes has increased 23% year-over-year while the average days on market continue to decrease.

Economic Growth in Huntsville

Economic growth is a primary qualifier for being listed as a "hidden gem" for real estate investment. A key driver behind Huntsville's growth is that it's home to many booming federal and private industries. Known as the "Rocket City, Huntsville's most prominent sectors include aerospace, defense, manufacturing, and information technology.

Notable employers include Boeing, NASA's Marshall Space Flight Center, the U.S. Army Redstone Arsenal in Madison, Mazda Toyota Manufacturing USA, and a Facebook data center.

The national unemployment rate is around 3%. Huntsville's unemployment rate is just 2%. Additionally, Huntsville's job growth rate is 3%, while the State of Alabama's is 1.2%.

Projections show Huntsville Metro will continue to grow, and organizations like Launch 2035 are working to ensure it does. As a result, this "hidden gem" real estate market presents many opportunities for real estate investors.

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