The investment analysts at Nerd Wallet recently crunched the numbers and came up with a list of the 10 best Alabama cities for homeownership.
In an effort to compile their list, Nerd Wallet sought to answer three questions:
Number one, “are homes available?”
“We looked at the area’s homeownership rate to determine the availability of homes,” said Nerd Wallet’s Tom Dunlap. “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.”
Secondly, “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,” Dunlap explained. “We used monthly homeowner costs to measure cost of living. Areas with high median incomes and low cost of living scored higher.”
Third, “is the area growing?”
“We measured population growth to ensure that the area is attracting new residents and showing signs of solid growth,” said Dunlap. “This is likely a signal of a robust local economy, which is another attractive characteristic for homebuyers.”
Before getting to the full list, here’s what the cities who made the top 10 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.
So without further ado, here are the Top 10 cities to own a home in Alabama:
1. Chelsea
Chelsea, a city of just over 10,000 residents, has experienced a population boom in the last several years. It grew over 10% between 2010 and 2012 alone.
2. Calera
Calera holds the distinction of being the fastest-growing suburb of Birmingham on this list. It grew 11.6% between 2010 and 2012, bringing its population to 11,579. Calera High School was also recently named the 15th best high school in Alabama by U.S. News and World Report.
3. Helena
With 91.7% of its homes occupied by owners rather than renters, Helena boasts the second-highest homeownership rate on this list with. Vulcan Materials Co. is perhaps the most notable employer in Helena. It describes itself as the United States’ largest producer of crushed stone, sand and gravel.
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4. Trussville
Median home value in Trussville is $229,200, the second highest on this list. A 120-acre youth sports complex and two large shopping centers helped boost the city’s standing as a great place to own a home.
5. Pelham
Nestled in the foothills of Oak Mountain, Pelham is near Oak Mountain State Park and has a well-known civic complex that includes an ice-skating rink, banquet hall and arena.
6. Moody
“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,” Dunlap said of Moody. “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
Homeowners in Alabaster only spend 23.4% of their monthly household income on mortgage and utility costs. It is also home to the largest retail center in Shelby County, the Colonial Promenade.
8. Pleasant Grove
This Birmingham suburb has the highest rate of homeownership on this list — 92.2%!
9. Madison
The median home value in Madison is $230,500, the highest on this list. Intergraph, a software company, is the city’s largest employer, but many of Madison’s residents commute to military jobs at Redstone Arsenal.
10. Leeds
Leeds owners pay an average of $1,121 a month in homeownership costs, the second lowest on this list. Leeds’ Outlet Shops at Grand River opened in 2010, adding more than 70 shops.
Follow Cliff on Twitter @Cliff_Sims
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