March 2020

Alabama Housing Market Vitality



Alabama metro area house prices are forecasted to outperform the national market. Current local conditions support an estimated 8.8% increase in the next twelve months. Alabama’s housing market vitality, based on the thirteen metro housing markets which comprise it, is stronger than that of the overall U.S. and currently ranks the state as seventeenth in the nation. Recent changes in local conditions suggest the possibility of improvement in short-term performance.

Housing Market Vitality

Housing Market Vitality summarizes the impact of economic conditions on future house prices. A value of 100 corresponds to conditions supporting current prices; values less than 100 correspond to a dampening effect; and values greater than 100 indicate a positive effect on house prices.  A housing market vitality value can be interpreted as a forecasted growth rate. Hence, a reading of 105.8 can be interpreted as a forecasted 5.8% annualized increase in house prices.

Alabama Metro Housing Markets

Alabama is comprised of thirteen metro housing markets that account for nearly 76% of the state’s population. The markets are unique in their demographics and local economies and exhibit trends that are distinct from the national or state narrative. Each metro market presents its own unique opportunity.

Anniston-Oxford-Jacksonville, AL Outperform 32
Auburn-Opelika, AL Underperform 367
Birmingham-Hoover, AL Outperform 160
Columbus, GA-AL Outperform 150
Decatur, AL Outperform 36
Dothan, AL Underperform 351
Florence-Muscle Shoals, AL Outperform 61
Gadsden, AL Outperform 96
Huntsville, AL Outperform 242
Mobile, AL Outperform 280
Montgomery, AL Track 302
Tuscaloosa, AL Outperform 73
Daphne-Fairhope-Foley, AL Outperform 161

Industry Specialization

Alabama’s state economy is specialized in Construction, Other svcs, and Manufacturing. Information, Leisure Hosp, and Edu Health svcs industry sectors are less important to the state economy compared to the national economy.

Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.


Compared to the U.S., there is a higher incidence of poverty amongst Yellowhammer State residents and they have less purchasing power. There are fewer high school graduates and a smaller proportion of the population is college educated. Alabama’s population is comparatively more diverse than the overall U.S. population.

A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.