Demand for real estate and rental property in Huntsville, Alabama continues to get greater as the economy and population rise. With the lowest supply of housing Huntsville has seen in over two decades, developers simply haven’t been able to keep up with the demand for property. A low supply of housing explains why rental rates have spiked the past two years and why Huntsville has become a hotspot for real estate investors. The steady job market and population growth are great indicators that real estate in Huntsville will continue to be a reliable investment.
Throughout the pandemic that has wreaked havoc for the entire nation, the population of Huntsville grew over 2%. This year Huntsville reached its highest population in history with 215,006 residents, a 19.19% increase since 2010. This is one of the highest growth rates in the country. Huntsville’s continual growth is being charged by new jobs and opportunities brought by companies to the local communities.
Not only has the population grown, but the city of Huntsville has also physically gotten bigger over the past two years. In 2019, Huntsville added over 400 acres through 13 annexations. This new land has opened up opportunities for real estate development growth on the western boundary of the city. Investors have been eager to jump at the land put on the market by the city, increasing the industrial developments in Huntsville. The mayor, Tommy Battle, spoke of the importance of these investments,” The more industrial property you bring into the area, the more money that comes back for your schools, the more jobs you’re able to provide, the better it works out to fund all the things that are necessary in the city of Huntsville”. As more developments appear, it is expected to see an improvement in the overall quality of life in Huntsville.
Currently Huntsville is the largest city in Alabama and the 2nd most populated metro area in the state. In 2018, Huntsville surpassed Montgomery in population and recently surpassed Birmingham, making it the largest city in Alabama. With rankings like these, there is no doubt that Huntsville is enroute to becoming one of the most thriving metro areas in the country.
Communities with persistent employment growth and home sales are driving the nation’s economic recovery. Huntsville’s total employment has already returned to pre-covid levels while the country collectively is still behind. Most Huntsville locals have watched as the city has visibly grown, but the statistics of this economic growth are surprising. According to the Federal Reserve Bank of St. Louis, the Gross Domestic Product (GPD) of the Huntsville metro area has increased by approximately 44% over the past 10 years, reaching nearly $29.5 billion. Considering the steady increase of economic value, the Huntsville Chamber of Commerce has predicted a GPD growth of 1.8% annually.
Within 10 years, the city of Huntsville’s job market is predicted to surpass the nation’s average. In 2019, the U.S. Census Bureau stated the median household income in Huntsville was $55,305 while the national average sat at $68,703. In 2020, Huntsville’s work force grew by nearly 5% while the average income rose by 5.6%. With a lowly 2.2% unemployment rate and a rising median household income, Huntsville’s work force is becoming one of the strongest in the nation. The employment growth of Huntsville is so steady, the Huntsville Business Journal reported a prediction of an additional 25,000 job positions to be filled by 2023. Movements fueling this growth include supply chain restructuring, increasing aerospace capabilities, expanding production lineups, a deliberate push for technology-centered jobs, and high-profile development projects.
In 2019, Huntsville issued 590 non-residential building permits, an increase of 2.1% from 2018. Among various other projects, the $2.3 billion Mazda Toyota Manufacturing facility, the Facebook data center, the Amazon fulfillment center, the $150 million Huntsville Hospital addition, and the $1.2 billion FBI campus are the most renowned. These projects alone are predicted to bring more than 9,600 jobs to this metro area. In 2021, the US Space Command announced the relocation of their headquarters to Huntsville, bringing more than 1,600 government jobs to the Rocket City. As Huntsville’s economy revolves around the technology industry, it has been ranked one of the best cities for defense jobs and one of the most educated cities in the country. In fact, 91.7% of Huntsville residents have a high school degree or higher, while 40.2% hold a bachelor’s degree or advanced degree.
Billions of dollars of economic progress are still taking place for Huntsville and are expected to bring thousands of new jobs to the region. With more jobs moving to Huntsville, the residential and commercial real estate market are seeing a positive impact.
Demand for Real Estate
With a growing population and one of the fastest growing economies in the country, the demand for real estate in Huntsville, Alabama is skyrocketing. Typically, the health of a housing market is determined by reviewing the stability, affordability, fluidity, and limited risk of loss, which is vital information for homeowners, tenants, and rental property investors. The Huntsville Business Journal has reported that the rent increase in the Huntsville metro is eleven times higher than the national average increase. This brings Huntsville towards the top of the list of small metro areas with the biggest rent hikes nationwide exposing that the Huntsville housing market is the healthiest in the state.
The job market in Huntsville has grown more than 13% within the last 5 years putting heat on developers to keep up with the demand for homes. Currently, there is only a one-month supply of homes on the market. This shortage of affordable homes in Huntsville has emphasized the need for rental housing, especially with the influence of local universities such as UAH and Alabama A&M. Essentially, the lack of affordable homes on the market means a higher demand for rental housing.
One of the biggest challenges real estate investors often face is finding a market where there is a strong demand from tenants while housing prices are predicted to progressively increase. According to the most recent Freddie Mac House Price Index, over the past five years Huntsville home prices have risen by 55.3%, over the past year Huntsville home prices have risen by 20.9%, and over the month of September home prices have risen by 2.1% This is what makes Huntsville so attractive for new developments.
Quality of Life
Huntsville is one of the hidden secrets of the South and is on its way to becoming one of the best cities in the country. It gives the greatest conveniences of a big city while maintaining the eclectic small-town charisma.
The overall quality of life for Huntsville residents is exceptional and one of the many catalysts for the city’s growth. The Huntsville metro area has maintained strong economic and population growth while the cost of living remains 5% below the national average. A low cost of living creates more discretionary spending money that goes into local businesses, advancing economic growth. Downtown Huntsville is experiencing a major wave of development with 12 substantial projects in the works and investments exceeding $400 million. These lively developments have created a closeness to the Huntsville community through notable concerts, needed retail, unique restaurants, weekly trivia nights, and numerous other community events and amenities. The larger a community becomes, the more there is to do every day of the week. This surge of activities has attracted many new young professionals to Huntsville.
The city of Huntsville has created an environment so attractive that the U.S. News and World Report ranked Huntsville third in the 25 Best Place to Live for 2021-2022, a twelve-spot jump from their report in 2020. Huntsville’s scores for jobs, desirability, cost of living and quality of life are what lead to this favorable ranking. Huntsville also caught the attention of Forbes and received strong rankings for education, job growth, and cost of doing business. All of these characteristics have made Huntsville a safe haven during the difficult times the United States has been facing.
The undeniable population and economic growth of Huntsville combined with an immense demand for real estate and a high quality of life explains why the Huntsville real estate market will likely continue to be a good investment for the years to come. If you’re interested in learning more about real estate in Huntsville, please feel free to reach out to one of our team members for more information. See all the services we offer here: triadproperties.com