Huntsville has emerged as a model of economic and real estate growth. The Huntsville real estate market paints a promising picture, with a median sales price of $373,012. On average, homes spend 50 days on the market. Remarkably, residents spend just 8% of their income on monthly Huntsville mortgage rates, affirming Huntsville’s affordability despite its flourishing economy.
The Huntsville housing market trends show no signs of slowing down. The city boasts 932 active home listings on Zillow and a notable increase in the number of homes sold, making Huntsville an enticing destination for both investors and homeowners alike. So, let’s embark on a journey through the past, present, and future of the Huntsville real estate market.
Historical Trends
In the latest Freddie Mac House Price Index (FMHPI) report for the Huntsville Metropolitan Statistical Area (MSA), the following insights emerge:
Over the past five years, the Huntsville real estate market has seen a substantial 88.5% increase in home prices when adjusted for seasonal fluctuations. In the last year alone, there has been a noteworthy surge of 29.7% in Huntsville property prices. Zooming in even further, the data reveals a recent monthly uptick of 4.6% in Huntsville home prices.
An essential gauge for investors seeking to evaluate the current and future demand for rental properties is the Housing Affordability Index (HAI). Typically, this index underscores a direct relationship between affordability and rental property demand. The less affordable the homes become, the greater the Huntsville buyer demand.
Aside from prices, demographics, people’s lifestyle choices, and the availability of homes also play a role in how many people decide to rent a place. In places like Huntsville, where houses are reasonably priced, many people still choose to rent rather than go Huntsville home buying.
According to the latest Alabama Housing Affordability Index report, the HAI for the Huntsville Metropolitan Statistical Area (MSA) was 180 in the first quarter of 2021. This means that families in Huntsville have nearly double the median income needed to buy a typical home in the area.
Huntsville’s housing market remains highly affordable. In fact, it has a long history of affordability, and it’s only getting better.
Current Trends
The city’s real estate market has witnessed a transformation, indicating changes in Huntsville home prices, inventory levels, and the presence of influential market participants. Here are some key Huntsville real estate trends:
Home Prices: According to North Alabama MLS, Huntsville homes consistently command prices above their assessed value. In the most recent month, the median Huntsville home prices reached $373,012.
Although this figure is a slight decrease from the previous month, it represents a 0.6% year-over-year increase. However, it’s important to note that Huntsville’s real estate market lags behind the national trend.
Across the entire country, Huntsville home prices have appreciated significantly, with a remarkable 6.7% increase year on year. Typically, this has resulted in a nationwide median home price of $203,867.
Strong market: Huntsville, famously known as “The Rocket City,” has witnessed significant advancements across various facets in recent years. Upgrades and renovations have touched everything from recreational facilities to medical care centers, substantially enhancing the quality of life for both Huntsville residents and visitors.
This is good news for individuals contemplating a move to the city or its surrounding neighborhoods. These transformations and developments in and around the city directly contribute to positive trends in the Huntsville real estate market.
Inventory increase: The Huntsville real estate market is undeniably favoring buyers. At present, the available Huntsville home inventory surpasses the demand significantly. Buyers now have a distinct upper hand in Huntsville home selling activities. In response to the surplus in Huntsville home sales, sellers are actively reducing their asking Huntsville home prices to stay competitive.
Slowdown: Currently, there is a national deficit of homes, and it’s probable that this deficit will grow in the coming year. This is attributed to the impact of increased Huntsville mortgage rates. Other factors include reduced Huntsville home sales, and builders adopting a more cautious approach.
In 2023, builders are once again curtailing their activities. It is worsening the supply-demand imbalance of the Huntsville real estate market, which has seen a substantial increase in home prices when adjusted for seasonal fluctuations.
The concern lies in the fact that they are unlikely to match the pace of demographic shifts given ongoing new family formations. Therefore, there might be an insufficient number of homes available during this period.
Factors Driving the Huntsville Real Estate Market Trends
According to a new forecast from the National Association of Realtors (NAR), Huntsville is among the top 10 real estate markets to watch in 2023. The report designates Huntsville as one of the 10 real estate markets projected to outperform other metropolitan areas in the coming year. NAR has evaluated the following key drivers fueling the current Huntsville real estate trends:
Population
A stable Huntsville housing market hinges on a consistent population, both in terms of its size and its ability to make purchases. Factors such as birth rates, mortality rates, and migration patterns shape the market’s long-term outlook. What truly distinguishes Huntsville from other cities is its population growth.
While the average population growth rate in the United States averages a mere 0.01%, Huntsville bucks this trend with a remarkable 1.8% growth rate. The area continues to attract numerous new families and individuals, driving up demand without a corresponding increase in supply. In fact, Huntsville experienced a notable 2.04% population increase from 2021 to 2022.
Booming Job Market
According to the National Association of Realtors, the local job sector actively supports the Huntsville real estate market. Remarkably, Huntsville recently earned the highest AAA credit rating from Standard & Poor’s for the seventh consecutive year.
Moody’s Investors Service also extended similar recognition, applauding Huntsville for its adept financial and economic management. It’s worth noting that Huntsville’s achievement places it among an elite group, as only 182 out of 2,960 cities have received similar accolades.
Huntsville’s dominant employment sectors revolve around aerospace and defense. NASA’s Marshall Space Flight Center and the U.S. Army’s Redstone Arsenal are two of the region’s major employers.
Additionally, numerous opportunities in the private sector await residents specializing in the science, technology, engineering, and mathematics (STEM) fields. Corporations like Boeing, SAIC, and Northrop Grumman offer rewarding career prospects. Notably, a Toyota manufacturing facility also contributes significantly to the local job market.
A Strong Economy
The city’s economy remains robust, with employment steadily on the rise as businesses channel billions of dollars into the region. Huntsville, in particular, has earned its reputation as the technology hub of the broader Southeast. The distinction has played a pivotal role in the city’s remarkable rate of growth.
Employment in Huntsville is better than the national average. We’re talking about 1.9% in Huntsville versus the national unemployment rate of 3.8%. What’s even more exciting is that the city has shaved off a significant 1.5% from its unemployment rate over just one year. That’s an impressive turnaround. And the best part? Employment is holding strong and seems to be on the upswing.
One significant outcome of this growth is that household incomes in the Huntsville region have soared. It’s now sitting $20,000 higher than they were two decades ago. And the good news is they’re projected to keep climbing, thanks to factors like inflation and the competitive job market.
Impact of the Trends
Let’s see what effect these trends have on the market:
First Time Homebuyers
U.S. News and World Report’s designation of Huntsville as the best place to live in the nation is a notable accolade. Additionally, the city consistently ranks as one of America’s top-performing large cities, according to the Milken Institute.
Let’s not forget the significant impact on first-time homebuyers. Higher Huntsville home prices and interest rates are pushing many of them out of the housing market. They have left them with little choice but to rent.
What’s more, these apartment complexes tend to keep raising their rates as inflation continues to creep up. It’s a challenging situation for those looking to make their first foray into homeownership.
Top Dollar for Home Sellers
Investors have demonstrated a persistent interest in Huntsville’s retail sector throughout the past few quarters. Their observations indicate minimal impact, except for a potential slight extension in the time homes spend on the market.
However, sellers continue to secure premium Huntsville home prices and more favorable terms. Typically, this is in contrast to conditions four to five years ago when Huntsville home buying was booming.
Opportunities for Real Estate Investors
Real estate investors in Huntsville are among the principal beneficiaries of the current Huntsville housing market dynamics. They find themselves in an advantageous position to leverage an already prosperous market.
Noteworthy is the potential within the foreclosure of Huntsville home inventory. It presents numerous opportunities for investors.
Of the homes presently on the distressed Huntsville housing market, some are set for auction. This means that the entire Huntsville real estate investing community will have the chance to bid on these properties.
However, the remaining foreclosures are owned by banks. Either way, these properties should present lucrative deals for Huntsville real estate investors.
- Huntsville Home Sales Forecast
Industry forecast suggests a promising opportunity for long-term Huntsville real estate investment. One major highlight is the potential for significant value appreciation.
Several Huntsville real estate trends will shape the sector’s future:
- A Resilient Market
Huntsville’s strong real estate market is bolstered by a thriving job sector, population growth, and affordability. These trends make Huntsville an attractive place to invest in or call home. Its diversified economy and robust employment base set the stage for continued market strength.
- Home Price Increase
There is a noteworthy surge in Huntsville home prices, reflecting its desirability among buyers and investors. This upward trend is expected to persist, making the Huntsville housing market appealing for those seeking Huntsville real estate investment opportunities.
- Inventory Expansion
The Huntsville housing market is growing, providing more options for buyers and potentially easing pricing pressure. The expanding Huntsville home inventory trend showcases the market’s adaptability and readiness to accommodate a diverse range of homebuyers.
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Final Thoughts
The Huntsville real estate market in 2023 presents a landscape of both stability and growth. With a flourishing job market, population increases, and Huntsville home affordability, the city continues to shine as an attractive destination for homeowners and investors alike.
As we look into the future, Huntsville housing market forecast suggests a promising outlook, with the potential for substantial home value appreciation in the coming years. The evolving dynamics and resilient economy are the Huntsville seller motivation. They can make compelling choices to secure their place in this thriving market. As we move forward, it will be fascinating to observe how the dynamic relationship between Huntsville home price trends and the Huntsville home selling process will shape the choices and outcomes of those participating in this thriving market.
