Huntsville Multifamily Market Report
Market Overview
Innovative advancements and new projects have played a pivotal role in driving Huntsville’s remarkable expansion in the last two years, and there are no signs of the market slowing down. The real estate sector is expected to experience further growth in 2024, fueled by the strong job market, population growth, affordable living costs, and ample development prospects. Employment in Huntsville has surpassed 280,000, marking an increase of over 12% compared to its pre-pandemic high of 250,000. In contrast, U.S. employment is approximately 3.5% higher than its pre-pandemic levels.
Huntsville serves as a key technology, aerospace, and defense hub for Alabama and the broader Southeast region. The market gains significant advantages from the U.S. Army/Redstone Arsenal base, which currently employs around 50,000 individuals, comprising active-duty soldiers, civilians, and contractors. The military base’s presence has attracted government defense contractors specializing in technology and advanced manufacturing to Huntsville, including companies like Boeing, Polaris, NASA, Lockheed Martin, GE Aviation, and Northrop Grumman.
Dubbed ‘The Rocket City’ due to its early contributions to rocket development for the U.S. Army in 1950, which facilitated the launch of the first satellite into orbit, the first American into space, and the transportation of astronauts to the Moon, Huntsville maintains a thriving economy with increasing employment opportunities as businesses invest billions in the region.
Huntsville Recent Accolades
- In 2023, Huntsville ranked among the top five best job markets in the U.S.
- Ranks #2 on U.S. News & World Report’s 2023-2024 best places to live
- Huntsville ranked as the #1 emerging tech market in 2023
Huntsville Population Metrics
- As of July 1, 2023, the population of Huntsville stood at 235,204, marking a 9.4% increase since the 2020 Census.
- Huntsville maintains its position as the swiftest-expanding major city in Alabama, boasting an average annual growth rate of 2% over the last decade.
City of Huntsville 2023 Multifamily Development Review Key Takeaways
- More housing units were granted Certificates of Occupancy (CO) in 2023 than any other year since the Development Review began keeping records in 1983.
- Apartment units granted COs increased by 35.6% year-over-year.
- From 2022-2023, multifamily approvals decreased by 53% (indicating starts have declined) after.
- As of Q1 2024, there are 10,784 units actively underway to be delivered in the near future.
Multifamily Market Performance
Huntsville has witnessed 17 consecutive quarters of positive net absorption. The demand in Huntsville is fueled by domestic migration and significant job expansion. Specifically, areas like Madison/Airport and University/Research Park have seen the highest net absorption over the past year.
Huntsville’s vacancy rate has been on a consistent upward trend for the past couple of years, mainly due to the significant increase in new supply surpassing the demand. The current vacancy rate in Huntsville stands at 19.2%, marking a record high for the market and significantly exceeding the national vacancy rate, which has also been increasing but at a slower pace compared to Huntsville.
With the ongoing increase in vacancy rates, the market has experienced negative annual rent growth, with rents in the market decreasing by 2.6% over the past year.
By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 19.2%
- Rent Growth: -2.6%
- Delivered Units: 5,649
- Absorbed Units: 2,951
- Sales Volume: $58.9M
