About the Montgomery Housing Market

The capital of Alabama, Montgomery is the most populous city in the state with a metro area population of approximately 390,000. It is located along the Alabama River midway between Birmingham to the north and Mobile to the south.

Montgomery, Alabama is another one of the best cities to buy rental property in 2023, offering both affordable properties and a strong rental market. The median home value in Montgomery is $181,065, while the median monthly rent is $1,215.

The largest employer in Montgomery, Alabama is the state government. Public school system jobs are the second-largest area of employment, followed by health care jobs at area hospitals and clinics and manufacturing jobs at Hyundai Motor Manufacturing Alabama, where the Elantra, Tucson, Santa Cruz and Santa Fe are built.

Montgomery has one of the highest ratios of median income to median housing costs in the country (making it a desirable place for both renters and property investors).

Median Household Income: $52,677
Metro Population: 385,798
11-Year Population Growth: 2.85%
Median Home Price: $181,065
Median Rent Per Month: $1,215 (0.67% rent-to-value ratio)
1-Year Equity Growth: 15%
Flood Risk:  12%

8-Year Equity Growth (January 2014 – December 2022): 44%
1-Year Rent Growth: 11%
8-Year Rent Growth (January 2014 – December 2022): 31%
Job Growth: +3,400 CES jobs created over the last year
1-Year Job Growth Rate: 1.94% (49% lower than the national average)
Unemployment Rate: 3.1% (16% lower than the national average)
Tenant Laws: Landlord-Friendly

What to Like
Very low property taxes
Stable government jobs
Downtown revitalization

What to Watch Out For
Smaller market
Some loss of population since 2010
Traffic congestion & pollution

– The median price of a home in the Montgomery area is $181,065, almost 50% lower than the national average.
– The median monthly rent for homes in the Montgomery metro area is $1,215. This is 38% lower than the national average.
– In the past eight years, home prices in Montgomery have increased 43.9% while rent prices have grown by 31.34%. Since 2014, average home price growth per year has been 5.34%, while average rent growth per year has been 4.65%. However, in the last 12 months, rents in Montgomery increased 10.5% YOY.
– The Montgomery metro area saw a population increase of 2.85% between 2010 and 2021, which was 61% slower than the national average. As of 2021, the population of the Montgomery metro was 385,798.
– Approximately 42% of the population rents in the area, while 58% own their homes.
– Montgomery County, Alabama, in the Montgomery metro area was ranked by ATTOM Data Solutions as one of the counties with the highest potential annual gross rental yields in 2018.

Strong rental market
Montgomery saw strong rental market growth in the last 12 months, with rents increasing by 10.5% year-over-year. While Montgomery home and rent prices still remain affordable, rent prices in the city have increased at almost the same rate as home appreciation.

Affordable real estate
The cost of living in Montgomery is 11% below the national average, and the cost of housing is 50% lower than the national average. This affordability will continue driving demand for Montgomery real estate in 2023.

Stable real estate market
The Montgomery real estate market is stable, with the average home price increasing 5.34% per year since 2014, and the average rent increasing 4.65% per year. This stability makes Montgomery an attractive place for long term real estate investing.

Purchasing Property in Birmingham

The average rent-to-value ratio for all cities in the Montgomery metro area is 0.67%, 17.7% greater than the US average RTV ratio of 0.57%

Economic growth: The economy of Montgomery is growing at a rate of about 2% per year. The city is home to a number of major businesses, and it is also a major center for transportation and logistics.

The neighborhoods in Montgomery with the highest percentage increase in home values since 2000 are: Gunter Annex, Cottage Hill, Centennial Hill, South Hull, Maxwell Boulevard North, Hayneville Rd Park, Chisholm, Mount Meigs, Washington Park, and Marston Way.

Montgomery, Alabama

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