Best Cities for Homeownership in Alabama

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by on June 18, 2014

Written by Tom Dunlap

There are many bright spots in Alabama: Analysts expect the state’s economy to grow 2.4% this year, adding about 25,000 new jobs in the fields of manufacturing, business services, health care and social assistance.

In 2013, more people moved to the Cotton State than left, according to a survey by Atlas Van Lines.  Personal income in the state increased 1.8% from 2012 to 2013, to a per capita income of $36,501, according to the Bureau of Economic Analysis.

For homebuyers who need help, many agencies statewide are certified by the U.S. Department of Housing and Urban Development as approved housing counseling agencies.

NerdWallet crunched the numbers to find the best cities for homeownership in Alabama with more than 10,000 residents. Here’s what the best cities have in common:

  • Nine of the top 10 cities for homeownership in Alabama are near Birmingham.
  • Six of the top 10 cities saw their population grow 5% or more, according to U.S. Census Bureau data crunched by NerdWallet.
  • In all of the top 10 places, homeowners spent less than 30% of their median household income on their homes, which meets the standard of affordability set by the U.S. government.

NerdWallet’s analysis to find the best places for homeownership in Alabama answers three questions:

 1. Are homes available? We looked at the area’s homeownership rate to determine the availability of homes. A low homeownership rate is likely a signal of competitive inventory, more options for renters rather than buyers and expensive housing. Areas with a high homeownership rate led to a higher overall score.

2. Can you afford to live there? We looked at median household income, monthly homeowner costs and median home value to assess affordability and determine whether residents could live comfortably in the area. We used monthly homeowner costs to measure cost of living. Areas with high median incomes and low cost of living scored higher. Are you thinking about buying a home? Learn more about current mortgage rates and mortgage refinancing options in our mortgage guide, as well as whether it’s best to rent or buy.

3. Is the area growing? We measured population growth to ensure that the area is attracting new residents and showing signs of solid growth. This is likely a signal of a robust local economy, which is another attractive characteristic for homebuyers.

For more information on these and other places, check out NerdWallet Cities. For more details on our methodology, see the section at the end of this study.

Best Cities for Homeownership in Alabama 

1.  Chelsea

From 2010 to 2012, Chelsea’s population grew 10.4% to reach 10,161 residents, a population more than double what it was in 2000, according to census data. Chelsea is in Shelby County, about 20 miles southeast of Birmingham, the largest city in the state. Residents who live near Birmingham have access to job opportunities all over the region. Birmingham is a center for banking, insurance, construction and engineering companies.

 2.  Calera

This fast-growing suburb of Birmingham had the highest population growth rate on our list. Calera’s population increased by 11.6% from 2010-2012, bringing the city’s population to 11,579 residents at the end of 2012, according to census data. Calera High School was recently named the 15th best high school in Alabama by U.S. News and World Report. Calera is also home to the Shelby County Airport and features weekly summer farmers markets.

3.  Helena

Helena, another suburb of Birmingham, boasts the second-highest homeownership rate on our list with 91.7% of homes in Helena occupied by owners rather than renters. Vulcan Materials Co. is one of the city’s largest employers and the company describes itself as the nation’s largest producer of construction aggregates — crushed stone, sand and gravel.

4.  Trussville

The list of growing Birmingham suburbs includes Trussville, where the median home value is $229,200, the second highest on our list. When it comes to shopping and recreation, Trussville’s residents are served by two large shopping centers built in 2000, and an 120-acre youth sports complex.

5.  Pelham

Located about 21 miles south of Birmingham on Interstate 65, the city’s population increased by 4.8% from 2010 to 2012. Pelham is nestled in the foothills of Oak Mountain and is close to Oak Mountain State Park. The Pelham Civic Complex features an ice-skating rink, banquet hall and arena.

6.  Moody

Many people who live in Moody, where the population grew 5.3% from 2010 to 2012, commute to Birmingham, about 21 miles west. The city was the first in the state to have a Miracle League field, a place where kids and adults with disabilities can play baseball. The league recently celebrated its 10th anniversary. Moody also has a senior center which hosts events and delivers meals to local homebound seniors.

7.  Alabaster

In this city south of Birmingham, homeowners spend just 23.4% of their monthly household income on monthly mortgage and utility costs. Alabaster is home to the Colonial Promenade Alabaster, the largest retail center in Shelby County.

8.  Pleasant Grove

Pleasant Grove, about 10 miles west of Birmingham, has the highest rate of homeownership, 92.2%, on our list. Officials in 2010 unveiled a new Pleasant Grove High School — which is part of the Jefferson County School District, the second-largest school district in the state.

9.  Madison

Homes in Madison are valued at $230,500 — the highest median home value on our list. Intergraph, a software company with headquarters in Madison, employs the most Madison residents. Additionally, many residents of this growing suburb of Huntsville in northern Alabama commute to military jobs at Redstone Arsenal, which houses the Army’s center for rocket and missile programs, and science and technology jobs at Cummings Research Park in Huntsville.

10.  Leeds

At $1,121 a month, homeowners in Leeds pay the second-lowest median monthly homeownership costs on our list. In 2010, The Outlet Shops at Grand River opened in this Birmingham suburb, adding more than 70 stores to the retail roster. Leeds High School has earned a reputation for athletics, with state championships in football and basketball in recent years.

 

Rank City Nearest Big City Home Ownership Rate Median Selected Monthly Homeowner Costs Median Monthly Household Income Homeowner costs as a percentage of household income Median Home Values 2010-2012 Population Growth Overall Score for Home Owners
1 Chelsea Birmingham 89.9% $1,683 $6,965 24.2% $212,700 10.4% 88.8
2 Calera Birmingham 81.2% $1,152 $5,181 22.2% $138,600 11.6% 88.6
3 Helena Birmingham 91.7% $1,431 $7,064 20.3% $178,700 6.7% 85.7
4 Trussville Birmingham 88.8% $1,668 $6,997 23.8% $229,200 4.9% 76.2
5 Pelham Birmingham 84.6% $1,351 $5,752 23.5% $167,600 4.8% 75.3
6 Moody Birmingham 78.0% $1,136 $4,358 26.1% $142,100 5.3% 71.2
7 Alabaster Birmingham 84.3% $1,387 $5,938 23.4% $164,000 2.8% 71.2
8 Pleasant Grove Birmingham 92.2% $1,478 $5,240 28.2% $155,200 1.0% 71.0
9 Madison Huntsville 74.1% $1,613 $7,678 21.0% $230,500 6.5% 70.5
10 Leeds Birmingham 71.6% $1,121 $4,015 27.9% $138,500 7.5% 70.4
11 Millbrook Montgomery 75.1% $1,141 $5,005 22.8% $143,900 4.0% 68.1
12 Gardendale Birmingham 84.1% $1,390 $4,992 27.8% $167,800 2.4% 67.8
13 Hartselle Huntsville 75.0% $1,097 $4,336 25.3% $128,000 2.9% 65.1
14 Prattville Montgomery 71.3% $1,284 $4,898 26.2% $149,300 4.1% 63.7
15 Daphne Mobile 73.4% $1,637 $5,324 30.7% $188,100 4.7% 62.8
16 Muscle Shoals Florence 74.9% $1,144 $4,287 26.7% $130,100 1.5% 61.4
17 Saraland Mobile 74.7% $1,170 $4,129 28.3% $130,000 1.8% 61.0
18 Athens Huntsville 65.3% $1,195 $3,931 30.4% $143,900 5.4% 60.2
19 Enterprise Dothan 65.1% $1,238 $4,248 29.1% $157,900 5.3% 60.1
20 Hueytown Birmingham 78.4% $1,125 $3,732 30.1% $111,200 0.2% 60.0

Methodology

The score for each city was derived from each of these measures:

1. Homeownership rate made up 33.3% of the total score. A higher rate earned a higher score. The rate comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

2. Selected monthly owner costs as a percentage of median household income made up 16.7% of the total score. A lower percentage earned a higher score. Monthly homeowner costs as a percentage of median household income made up one-half of the affordability score. Median household income comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 03. The figure for monthly homeowner costs comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

3. Median home value made up 16.7% of the total score. A lower value earned a higher score. Median home value made up one-half of the affordability score. Median home value comes from the U.S. Census American Community Survey 5-year Estimates for all places in the state, Table DP 04.

4. Population change from 2010 to 2012made up 33.3% of the total score. A higher percent change earned a higher score. The 2010 population comes from the 2010 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. The 2012 population data comes from the 2012 American Community Survey 5-Year Estimates for all places in the state, Table DP 05. NerdWallet calculated the percent change.

Only places with 10,000 or more residents were included in the study. Cities with higher than average crime were excluded from the top 20 ranking.

Image: James Willamor/Flickr: https://flic.kr/p/7fqMb

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