The Montgomery real estate market has seen a vast improvement since the worst part of the recession. Equity has made an incredible comeback, and homeowners are more willing than they have been in recent years to make moves. That said, Montgomery real estate investing has seen similar scenarios transpire. For all intents and purposes, Montgomery, Alabama is heading in the right direction.
The Montgomery real estate market continues to benefit from price growth relative to last year. However, while price gains have certainly slowed in the capital of Alabama, Montgomery real estate is appreciating at a faster pace than the rest of the country, 7.1 percent and 5.7 percent respectively. The current median home price in Montgomery has now reached $138,700. While that is significantly lower than the national average, it is considerably more affordable. That said, affordability should continue to be the driving force of both supply and demand in the area. First-time buyers and Millennials should find the Montgomery housing market more attractive than most others. That said, Montgomery real estate investing should see a spike in activity as well.
The Montgomery housing market experienced a major setback at the onset of the recession. However, the expansion of the national economy has returned a significant amount of equity to the market. The Montgomery real estate investing market and regular homeowners have been able to make up a lot of ground with the return of positive equity. The following highlights how much equity has been gained relative to the year of the home’s purchase:
- Homes purchased in the Montgomery housing market one year ago have appreciated, on average, by $11,175. The national average was $14,170 over the same period.
- Homes purchased in the Montgomery housing market three years ago have appreciated, on average, by $17,390. The national average was $53,857 over the same period.
- Homes purchased in the Montgomery housing market five years ago have appreciated, on average, by $22,062. The national average was $48,036 over the same period.
- Homes purchased in the Montgomery housing market seven years ago have appreciated, on average, by $8,550. The national average was $13,870 over the same period.
- Homes purchased in the Montgomery housing market nine years ago have appreciated, on average, by $19,701. The national average actually decreased $2,822 over the same period.
The local economy continues to support both supply and demand, but things could stand to improve a little more. While the unemployment rate in Montgomery is slightly better than the national average, it is just that – slightly better. At 5.5 percent, unemployment has only improved 0.4 percent over the course of a year. On top of that, local employment growth has been poor and needs to improve.
With the employment situation in Montgomery only a little better than the national average, it is a good thing that the area is affordable. Not only is the Montgomery housing market affordable, it is more affordable than most others across the country. While Montgomery homeowners typically spend about 7.8 percent of their income on monthly mortgage obligations, the rest of the county is accustomed to spending about 15.1 percent. That is a huge difference to first-time buyers and Millennials who are funding it increasingly harder to save money.
Affordability is taken to a whole new level when distressed properties are taken into consideration. In fact, the Montgomery real estate investing market will have ample opportunity to take advantage of said properties. According to RealtyTrac, Montgomery has about 293 homes that are in some state of foreclosure. The overwhelming majority of those properties are scheduled to be placed up for auction. In fact, 76.1 percent of all the distressed properties that have been repossessed will be up for auction. The other 23.9 percent are sitting on the books of banks as non-performing loans. Either scenario should benefit the Montgomery real estate investing market.
Of course, each of these properties is available at a discount, compared to non-distressed homes. The median sales price of a non-distressed home was $64,346. The median sales price of a foreclosure home was $43,500, or 32 percent lower than non-distressed home sales. That is a savings of nearly $20,846 per home. The discount should help boost activity in the Montgomery real estate investing market.
Montgomery real estate investors should look to the city’s most popular neighborhoods. According to Trulia, the most popular neighborhoods in the Montgomery housing market are Garden District and Old Cloverdale, with average listing prices of $277,411 and $234,950. On the other hand, Edgewood recently demonstrated an increased propensity towards price increases. While not the most popular, Edgewood recently saw a week-over-week price increase of 18.3 percent.
The Montgomery housing market has several demographic and economic indicators working in its favor. The area provides affordable housing with a strong enough economy to make things sustainable. Perhaps even more importantly, prices are still more affordable than most other places in the country. Now may be the best time to acquire homes in this particular city.
Montgomery Housing Market Summary:
- Current Median Home Price: $138,700
- 1-Year Appreciation Rate: 7.1%
- Unemployment Rate: 5.5%
- 1-Year Job Growth Rate: 0.2%
- Population: 201,332
- Median Household Income: $45,859