The Birmingham, AL real estate market had an incredibly notable year in 2022. Birmingham not only saw incredible appreciation in house prices but also some astonishing buying and selling patterns. Here, we’ll review the Birmingham real estate market of 2022 and examine why it has been such an exciting period for real estate in the area. We’ll also look at why Birmingham, AL may be the right location for your investment in the near future.
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Q1-Q3 of 2022
The real estate market for Birmingham, AL has been on an incredible high since the beginning of 2022. In January 2022, the median listed price for a home was $150,850. By October 2022 that figure had risen to $188,500, a rise of over 22% in nine months.
Listed Price Vs Sales Price
However, what is even more startling is the difference between the prices that homes were listed for and what they eventually sold for. Normally there is some variance with homes selling for a little under or over their asking price. In Birmingham, AL in 2022 homes sold for unusually higher prices than listed throughout the year.
In January 2022, though the median listed price for a home was $150,850, homes sold for an median price of $171,500, representing a 12.8% difference. This figure is already very high, but this difference would only become more pronounced as the year continued.
In April 2022, the median listed price was $159,950, with the average sale price coming in at $225,000. This jump almost tripled the difference between median price listed and median sales price, a figure which now stood at over 34%. This would represent the peak in difference between listed price and price the property was sold for. By October 2022 the difference was only a little over 17%.
Time Spent on the Market
These patterns are supported by an overall reduction in the time a home spent on the market before being sold.
From January to February 2022, there was a slight increase in the amount of time homes spent on the market, going from 42 days to 49 days. However, from February onwards we would see a dramatic drop with the months of March to August coming in at between 36 and 39 days. Since August, the amount of time a home spends on the market has been stable at 44 days. Although, the reduction in overall time a house spent in the market is in line with house prices rising, and greater demand, the changes in time are not as dramatic as we may have expected given the big difference between listed and sales prices.
However, where we can see a much bigger difference is if we were to project a year earlier. In February 2021, the median time a home spent on the market was 57 days, in April 2022 it was 36, a difference of 45%. Apart from a couple of months, it is clear that homes are consistently selling faster in Birmingham Alabama, and if we project even further back we can see that this has been a trend since the beginning of 2020.
Why Have Homes Appreciated Strongly in Birmingham?
Possible factors that could have caused such a surge in prices in Birmingham in 2022 are myriad but may include increased migration into Alabama, the pandemic causing house prices to surge across many parts of the country, the opportunity to work remotely, and development in Birmingham, providing not only housing opportunities but economic ones.
Birmingham Has a Low Cost of Living
When you compare the cost of living in Birmingham to the rest of the country, it’s easy to see why relocating to Birmingham is so appealing. In a model that compared living costs across the whole US, Birmingham is considerably lower in most criteria for cost of living.
Based on the average cost of living in the US which used a reference number of 100, the overall cost of living in Birmingham is 75.7. Critically, the biggest gain that may have substantially affected the Birmingham, AL real estate market is housing where the number came in at 27.1. This is 72.9% cheaper than the national average for housing! Birmingham was also considerably cheaper to buy housing in than the rest of Alabama which came in with a score of 56.6.
It would seem then that Birmingham would not be a particularly attractive place to relocate to given that the prices while on the rise were still so cheap. However, this couldn’t be further from the truth.
A Great Place to Raise a Family
Birmingham comes in a very highly placed 14th for areas to raise a family, in a survey which looked across the whole of the US. This is due not only to the affordability of raising children here but also because the city has very high graduation rates. Whether you choose a public school or one of the 73 private schools, you’ll be able to provide top quality education for your children.
A Growing Tech Hub
Birmingham is acknowledged as a fast growing tech hub in the country. This has been boosted by a body called the Alabama Future Fund (AFF) who provide financial and technical assistance not only to startups in the state but also to companies based outside Alabama who wish to migrate to the state.
While Birmingham and Alabama do not quite compare to the giants of Seattle and Silicon Valley, there is a steady progression in the number of tech companies choosing to set up in the area.
Of course, this influx of investment into the area has had a ripple effect, with entrepreneurs, businesses, and services springing up to cater for the needs of these companies and the people they attract.
Work from Home
The pandemic affected not only the way we worked but gave many a new perspective on how they wanted to live their lives. Although, work from home was already gaining popularity even before the pandemic, the pandemic put into sharp focus that it was a viable work model for many industries. Post lockdown, we are seeing that many are reluctant to return to the office, indeed this may mean having to relocate back to places they moved from.
Birmingham, AL saw a large influx of people not only keen to take advantage of more flexible work from home practices provided by employers, but who were attracted by the better standards of living and lower cost of living when compared to other metropolitan cities.
Buy to Rent
More people in Birmingham rent than own their homes. This has made buying to rent a very viable option for investors. Neighborhoods like Belle Meade and Southside Birmingham can command rental prices close to $1,900. While there are laws that ensure non-discrimination between the practices of landlords and tenants, there are no laws that determine how much a landlord may charge for their properties. The market sets the price. As such, landlords are a relative liberty to set their own prices. This makes buying to rent a solid strategy to hedge against high inflation and interest rates.
The Birmingham, AL real estate market, with its very affordable properties and large rental pool makes it possible to become a landlord for investors who would have little chance in other more expensive cities.
Birmingham Housing Stock
Birmingham has a very wide array of housing on the market and you’ll find single family homes, luxury homes, gated communities, waterfront properties, condominiums and more.
For those looking for a luxury property in Birmingham, they’ll find that their money will get them a considerable amount of house. For a little over $3M, you can acquire a property that’s almost palatial. You could get a home that covers 10,000 sq ft, has 6 beds and 7 baths, 3 or more garages. The finishing will be executed to the highest levels and there will be a raft of modern and high end furnishing and equipment. Kitchens may be gourmet and bathrooms will likely feature hot tubs or other luxurious features. The surroundings will present beautiful views and be perfectly maintained. All of this will be situated in a great location that will have easy access to amenities.
If you’re looking at something a little more modest, at around the $800,000 mark, you can expect a great home that would be considered a luxury home in many other parts of the country. At this price point, you can expect 4 beds and 3/4 baths, and a coverage area of a little over 3000 sq ft. As space is not really an issue in most parts of Birmingham, many homes in this price point will offer at least 2 garages and/or some type of extended storage.
If you’re a first time buyer but are looking to start a family or already have one, there are many great options. For under $250,000 you can get 3 beds and 2 baths. Depending on the location you could still have excellent views and green surroundings. Of course, the square footage will be somewhat smaller than the previous examples, but you can still expect coverage of around 1500 sq ft.
Also note that Birmingham is a great place to retire and there are many independent and active living communities. Though Florida is often regarded as the retirement state, Birmingham shares many similar benefits. There’s great weather most of the year with hot summers and mild winters, and Birmingham has an energizing culture. However, Birmingham is so much cheaper than Florida, making it an option for those looking to get the most out of their homes during their retirement.
Enjoying Life in Birmingham
Birmingham has a long and colorful history, and this has made it a diverse and rich place to live. There’s great culture and entertainment and throughout the year there’ll be festivals, fairs and many other events.
The nightlife is varied with great night spots and varied venues. Along with the bars and clubs there are some great breweries to visit where you can not only sample creative brews but also get tours of how the drinks are made.
We shouldn’t forget that Birmingham is a major musical center and country, bluegrass, and jazz hangs rich in the air. However, Birmingham also has its own Symphony Orchestra and you can watch them as well as a host of plays and concerts.
This being the south, food is almost guaranteed to be good when you eat out. What’s not so well known is that there is so much more than traditional southern fare to be had. As well as traditional southern cuisine and possibly the best barbecue in the US, there’s fine dining, seafood, as well as great Asian restaurants. Whatever you’d like to eat in whatever style, there’s something for everyone.
There’s also a raft of museums and gardens, as well as great outdoor activities.
When you add all of these with the fact that Birmingham is very affordable, has great schools and colleges, and has a growing economy, a clearer picture forms even so many are willing to pay above asking to land a home in Birmingham. Homes in Birmingham are a steal.
Finding Your Home in Birmingham
After hearing about why Birmingham was such a remarkable real estate market in 2022, you may want to find out a little more about investing or even living in the area. If you’d like to find out more about your opportunities and options in Birmingham, AL turn to the professionals that have brought success to so many clients.
Sold by the Bell is headed by Mary Bell. Mary grew up in the area and this has given her a deep insight and understanding of the real estate market in Birmingham, AL. An active member of the community, Mary is perfectly positioned to make your venture a success, and all done in the smoothest way. To buy or sell your property in Birmingham, AL contact Mary at 205.492.0004 or you can leave a message here. We’d love to hear from you.