More residents in the Huntsville area are seeking apartment communities with higher-end amenities as the housing market recovers.
That was one of the talking points Thursday during a 2015 north Alabama housing forecast presentation by MarketGraphics Southeast President Rob Hale at the Huntsville Botanical Garden. The annual breakfast event for area realtors and homebuilders was sponsored by BancorpSouth.
Hale said the recession sparked a shift in the number of north Alabama millennials, retirees and move-down buyers interested in new apartment projects.
“The recession started it because people lost their homes,” he said. “They were able to rent, but not buy, and I think that started a trend of new apartment construction and it built on that.”
The movement toward apartments isn’t just affecting Huntsville, Hale said, but the entire U.S. He said the developments are especially attractive to the under-30 crowd that’s not as interested in purchasing a new or existing home as past generations were.
Apartments are also a good option for retirees who need smaller housing, but still want luxury, an audience member pointed out.
“There’s the pool, there’s somebody else mowing the grass, there’s really great amenities with these new developments,” Hale said. “It’s attractive to people who at some point might have been first-time homebuyers.”
The local market, which includes Madison, Limestone, Morgan and Marshall counties, is the picture of stability, Hale told the crowd. The four-county area had 2,470 building permits last year, down slightly from 2,501 the previous year and 2,518 in 2011.
While north Alabama led the Southeast for several years in market vibrancy (new home permits divided by total population), Hale said that’s no longer the case today. Markets like Jacksonville, Fla., Nashville and Charleston, S.C., are experiencing more vibrant housing markets right now.
Huntsville hasn’t always followed the national trend, he said, and the market doesn’t encounter the same peaks and valleys as other places sometimes do.
“You did not experience the wave of destruction that took place in a lot of places in the Southeast,” he said. “The coastal Florida market was devastated by the recession. This just illustrates how stable the market is in north Alabama.”
The area had 15,000 vacant developed lots in February 2011. Since then, that figure has declined to roughly 11,500. There are 546 homes under construction in the four-county area, Hale said.
With companies like Polaris and Remington Outdoor promising thousands of jobs in Huntsville over the next several years, Hale hopes the local housing market enters a phase when new jobs have a direct link to the construction of new houses.
Jobs equals housing
Hale said the market needs about 1.25 new jobs for every building permit issued in order to sustain healthy housing activity.
“Of all the markets in the Southeast over the years, the Huntsville market has been one of the most stable, even through the recession,” he said. “Our hope is that as new jobs arrive in Huntsville, it will result in an improvement in the new home housing market.”
Hale praised the area’s public leadership in attracting new companies and diversifying the economy. “That’s certainly not true everywhere,” he added.
Penny Billings, division president for BancorpSouth, said her biggest takeaway from Thursday’s event was “location and where you’re building.”
“We have seen some pretty good vibrancy right now in new home sales,” she said. “Some of our builders are reporting that their sales are a lot higher than they’ve been.”