Investors often ask me about the multifamily market in Birmingham. Multifamily income properties allow the owner to take advantage of scale as they operate the investment. The theory is that one roof for 4 units of income is better than 1. This makes sense. It also makes them highly desirable.
The multifamily market in Birmingham is much different than many other large cities. The inventory is limited, but relatively cheap. It’s hard to find these properties in desirable area’s.
I pulled some statistics from MLS to tell the story best.
Whats the current situation?
- There are currently 43 active listings on our MLS. This number has fluctuated between 40 and 50 over the last two years.
- This year to date there have been 109 multifamily listings. This compares to 26,551 single family listings.
- The median days on market is currently 111.
Digging Deeper
To get more data I pulled all listings from the last 3 years. October 2015 to October 2018. It includes properties that sold as well as those that didn’t. The following charts were produced from that data.
What areas of the city are these listings in?
- A large portion of this inventory (31%) isn’t actually in Birmingham, but in neighboring counties like Calhoun and Talladega.
- About 31% of this inventory is in economically challenged areas of Birmingham.
- About 7% of this inventory is in suburban area’s with desirable school systems.
How many units do these multifamily buildings have?
- The majority of these buildings (47%) were duplexes.
- Only about 21% were 5 units or greater in size.
- The largest property listed was 32 Units for 999,000. It’s still for sale as of the time of this writing. You can see it here.
How much do these cost?
- The median price for a multifamily building was $110,000
- The middle 50% was between about $60,000 and $217,000
- The lowest price listing was listed for $4,999 and sold for $4,000
- The highest priced listing was a 20 Unit building in Centerpoint for $1.4 Million. It expired unsold.
Do these listings sell well?
- 45% of the properties listed in the 3 year period of sold.
- 38% of the listings expired or were cancelled.
- 17% are still active in some form
If you enjoyed this post, you may like this one about house hacking.
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