Birmingham Market by Class

[Jason Cory]

Class A

Mountain Brook - https://www.neighborhoodscout.com/al/mountain-brook

Homewood - https://www.neighborhoodscout.com/al/homewood

Vestavia Hills - https://www.neighborhoodscout.com/al/vestavia-hills

Hoover - https://www.neighborhoodscout.com/al/hoover

Class B

Alabaster - https://www.neighborhoodscout.com/al/alabaster

Pelham - https://www.neighborhoodscout.com/al/pelham

Gardendale - https://www.neighborhoodscout.com/al/gardendale

Trussville - https://www.neighborhoodscout.com/al/trussville

Helena - https://www.neighborhoodscout.com/al/helena

Chelsea - https://www.neighborhoodscout.com/al/chelsea

Indian Springs - https://www.neighborhoodscout.com/al/indian-springs-village

Class C

Fultondale - https://www.neighborhoodscout.com/al/fultondale

Centerpoint - https://www.neighborhoodscout.com/al/center-point

Roebuck - https://www.neighborhoodscout.com/al/birmingham/roebuck-crest-estates

Forestdale - https://www.neighborhoodscout.com/al/birmingham (Unincorporated)

Adamsville - https://www.neighborhoodscout.com/al/adamsville

Graysville - https://www.neighborhoodscout.com/al/graysville

Hueytown - https://www.neighborhoodscout.com/al/hueytown

Pleasant Grove - https://www.neighborhoodscout.com/al/pleasant-grove

Mt. Olive - https://www.neighborhoodscout.com/al/gardendale

Irondale - https://www.neighborhoodscout.com/al/irondale

Moody - https://www.neighborhoodscout.com/al/moody

Leeds - https://www.neighborhoodscout.com/al/leeds

Grayson Valley - https://www.neighborhoodscout.com/al/birmingham (Unincorporated)

Pinson - https://www.neighborhoodscout.com/al/pinson

McCalla - https://www.neighborhoodscout.com/al/bessemer (Unincorporated)

Mulga - https://www.neighborhoodscout.com/al/mulga

Minor - https://www.neighborhoodscout.com/al/mulga (Unincorporated)

Morris - https://www.neighborhoodscout.com/al/kimberly (Unincorporated)

Kimberly - https://www.neighborhoodscout.com/al/kimberly

Class D

Midfield - https://www.neighborhoodscout.com/al/midfield

Tarrant - https://www.neighborhoodscout.com/al/tarrant

West End - https://www.neighborhoodscout.com/al/birmingham/zipcode/35211

Ensley - https://www.neighborhoodscout.com/al/birmingham/zipcode/35208

Inglenook - https://www.neighborhoodscout.com/al/birmingham/inglenook

Class F

Bessemer - https://www.neighborhoodscout.com/al/bessemer

Fairfield - https://www.neighborhoodscout.com/al/fairfield

Eastlake - https://www.neighborhoodscout.com/al/birmingham/zipcode/35206

Lipscomb - https://www.neighborhoodscout.com/al/lipscomb

Brighton - https://www.neighborhoodscout.com/al/brighton

North Birmingham - https://www.neighborhoodscout.com/al/birmingham/zipcode/35207

Comparison by Class

Homewood – Class A

Median Home Value - $379,563

Median Household Income - $66,573

Individuals Below the Poverty Level – 11.1%

Crime Index – 8 out of 100 (100 being Safest)

School System – Top 10 in the State

Average Market Rent - $1,420

Alabaster – Class B

Median Home Value - $179,984

Median Household Income - $73,325

Individuals Below the Poverty Level – 10.2%

Crime Index – 40 out of 100 (100 being Safest)

School System – Top 50 in the State

Average Market Rent - $1,362

Centerpoint – Class C

Median Home Value - $117,940

Median Household Income - $39,134

Individuals Below the Poverty Level – 26.7%

Crime Index – 12 out of 100 (100 being Safest)

School System – Lower 3rd of State

Average Market Rent - $1,162

Tarrant - Class D

Median Home Value - $73,542

Median Household Income - $26,800

Individuals Below the Poverty Level – 32.6%

Crime Index – 1 out of 100 (100 being Safest)

School System – Lower 3rd of State

Average Market Rent - $1,045

Alabama is similar to all other states regarding property class. They are driven mainly by school systems and crime statistics. Since Birmingham is a smaller MSA the per capita rates for crime are skewed and typically reflect more crime than actually happens.

Homewood is a Class A area however, due to recent annexations the crime stats reflect an area of higher than normal crime. Homewood is an affluent suburb of Birmingham. It was chosen as a comparison to show this fact. It has one of the highest median home values and income in the state. The school system is consistently rated in the top 5 of the state. This is a predominately owner-occupied market.

Tarrant City is a lower income area that is a predominately tenant-occupied market that receives assistance in one form or another. This area consistently rents above market. It is a higher crime area of Birmingham.

Birmingham is not the crime filled market data would typically suggest. It consists mainly of domestic abuse and/or petty vandalism.

If you are investing in Birmingham I ask you do your own research to verify the data provided. Class C & D areas are the best markets for renting properties. The Class D areas in Birmingham would likely be Class C areas in other markets however, the classes have been assigned based on local activity and knowledge of the markets as a whole for Birmingham and the MSA.

I used to Appraise Real Estate prior to Investing. I only invest in Class C or D areas since the return is higher and the pool of potential occupants never decreases. In Class A or B areas the return is lower since the entry prices are higher and the return is typically half of predominately rental areas. If you are investing for cash flow it is better to invest in areas that reflect your goals instead of investing in areas that do not offer the returns you are seeking.

If you have any questions about Birmingham I welcome you to reach out to discuss further.

[Jason Cory]

The market in Birmingham actually makes perfect sense in terms of Real Estate usage and supply/demand. Property usage/supply drives demand. If you are in a predominately owner-occupied areas (Class A & B) the median value is higher and appreciates at a different pace than non owner-occupied areas. If you are in predominately rental areas (Class C & D) the rent amount not value appreciates. Investors that attempt to rent in predominately owner-occupied areas attempt to fit a square peg in a round hole unknowingly. This is in every market in the country.

In it's most simple terms, no one ever won the Monopoly game by owning Boardwalk. They won by accumulating hotels in an area. In order to do that they controlled supply on that section of the board. The more you invest in an area you begin to have a say in market value and market rent.

If you analyze every market they will all reflect the same data when comparing owner-occupied areas vs rental areas. 

You only make the most money/return when a property is functioning under its highest and best use. If you're in the suburbs a housing authority voucher won't appraise for as much because there are less comps. You're not comping home value. You comping rent. If you go to rental areas you have less retail market sales because that not the highest and best use of the areas.

@Account Closed I hope this helps.