In the wake of COVID-19, many real estate markets across the country have experienced significant growth as the advent of remote working has allowed both employees and employers alike to untether themselves from their traditional workspaces. This large-scale movement of industries and workers has led to the rapid expansion and development of many areas of the country, with many southeastern states leading the charge. One such market is that of Huntsville and North Alabama. 

During his appearance on the National Land Podcast, Land Broker for the Huntsville, AL Office Jonathan Berryhill explained some of the growth seen in his area over the past few years and provided his outlook on the North Alabama real estate market in 2024!

Home Prices in North Alabama

Home prices across the country have significantly increased as inflation and skyrocketing demand continue to push the median home price in America ever higher. While this growth was seen in many markets across the country over the past few years, the market in North Alabama has been slowly but steadily growing for the last decade, culminating in notable developments in Huntsville, Marion, and the surrounding areas.

“So from 2014 to 2023, home prices in [North Alabama] grew by 86%. That’s insane. It’s about an average of 9.29% every year; you can’t hardly find a 401K with that kind of return. So 10 years ago if you would have bought land or a home, statistics show that you’d have made about 10% every year and if you were to sell today, you’d be looking at an 86% growth. That’s pretty substantial if you ask me for an investment. And that’s what’s happened here in the Huntsville/North Alabama area. It’s all because of the development that’s going on here, from government contracting with Redstone Arsenal and NASA to major manufacturing companies like Boeing, Polaris, Toyota, and Mazda. It’s not slowing down either.”

While interest rates have slowed purchases somewhat, there’s still an abundance of willing buyers who have waited to invest in land or a home. Berryhill also explained that developers and investors have remained largely undeterred by current interest rates, with acquisitions by these two types of buyers staying consistent.

Commercial Development in North Alabama

Driving much of the growth in North Alabama has been the influx of commercial developments and industrial expansion, leading to more available jobs and housing. When it comes to the way that development is being approached in North Alabama, community planning appears to be front and center in the minds of developers and city planners. Rather than the sprawling suburbs and shopping centers of yesteryear, today’s developments seem to take a more holistic approach to living and access to convenience services. Berryhill emphasized this, stating the following:

“One of the recent [developments] we had was in Madison with the Trash Panda Stadium. That whole area was woods and agriculture, and they’ve turned it into a very hip-type area with loft apartments, condos, nice restaurants, and the stadium. They’ve created such an attraction. So it’s not just your everyday commercial-type stuff that makes people want to come to Huntsville or North Alabama. It’s not just everyday shopping centers, but instead, there are areas where everything’s kind of built around a community in itself. There was another development a few years ago called Cliff Farms, and it’s been turned into living spaces, green spaces, commercial spaces, and on the backside even some industrial space. It’s neat, it’s not just a cookie-cutter shopping center neighborhood.”

Current Real Estate Conditions and Predictions for 2024

Given the significant development observed over the past few years in North Alabama, many are likely wondering whether this growth is expected to continue throughout the coming year. While there are many factors to consider which could impact development such as interest rates, inflation, and other large-scale influences, many remain optimistic about the future of the North Alabama real estate market.

Speaking to the growth seen in Huntsville and Madison, Berryhill stated, “When you start adding population, you start getting limited on your inventory, and then prices are going to be way higher. We’re seeing the same thing with Athens on the other side of Madison too. I just put a property under contract in Madison around the $50,000 per acre range. If you go out to Limestone County, we’re selling around $15,000 per acre. Move into Lauderdale County and we’re seeing 10, 15, up to $18,000 an acre there.”

“It’s all because of the development, and I think we’re going to plateau where it is for a little while. I always say real estate is like stairs; you shoot up and then you flatten out, and then you shoot up again and flatten out. I think we’re at a flat mark right now, and I think that whatever happens in the election will determine the direction that it goes. I don’t believe we’re going to go down. Land doesn’t tend to go down in value because we aren’t making any more of it. So again I tell my buyers and sellers that now is the time to buy because it’s gone up 86% over the last decade and it’s likely to continue. If you look at the markers from 10 years ago and what’s happening here in North Alabama, in my opinion, you’re nuts to think anything is going down with the statistics and development we’re seeing out there right now.”  

Possibly as a response to the growing demand for land ownership from the general public, land loans are becoming a more common offering from traditional lenders and creating more opportunities for first-time land buyers to make their initial purchase. Berryhill spoke to this shift, stating, “Right now rates on land are in that 9-10% range, some lenders I’ve talked to are a little lower than that, but what I’ve noticed the most is that your everyday bank is now looking at land loans. I think it’s going to grow even more popular because there’s a lot more land here than there are houses. I think that’s the biggest thing I’ve seen. It has slowed down some in residential (areas) but for land purposes, there are still a lot of people buying, they still see the value.”

If you’re interested in learning more about the real estate market in North Alabama or possibly finding a property of your own, reach out to Jonathan Berryhill at Jberryhill@NationalLand.com or contact your local Land Professional today!