20
Huntsville BUSINESS JOURNAL
REAL ESTATE
Luxury and Convenience: Huntsville and Madison are Keeping Up with Luxury Apartment Trend If anything, the pandemic has put a finer point on the concept of “Home, Sweet Home.” With most jobs shifting to a remote platform, along with the closing of schools and fitness centers, many reconfigured their living spaces into mini offices, classrooms, and home gyms. During the last year and a half, homeowners and renters alike had their own “four walls” to contemplate. And contemplate, they did. Some homeowners took the renovation route by adding a room or creating more efficient and dedicated workspaces. Unfortunately, aside from moving, renters have few options for improving their living spaces. Many of the apartments in Madison County are “vintage,” built in the 60’s, 70’s, and 80’s, with standard issue floor-plans and basic amenities. Historically, this was not a big deal, as most tenants saw their apartments as the eventual steppingstone to home ownership. Fast forward to 2021. Inflation has been growing at a faster pace than the average paycheck, making home ownership out of reach for many. Housing prices have skyrocketed, making it a seller’s market. There’s also a dearth of available homes for sale. Still, consumers want to enjoy a sense of community whether they are homeowners or tenants. Many also like to entertain, but only need the extra space occasionally. These factors contribute to the recent explosion of high-caliber luxury rental communities, offering more bang for the buck. In most major US cities, there has been an uptick in the number of luxury apartments. Evidence suggests that this trend is largely driven by millennials. Madison County demographics seem to be following the national trend. The average age of the Madison County tenant seems to confirm the millennium-driven-market theory. Roughly 47% of Huntsville renters fall into the 25–44-year age bracket;
this same demographic comprises 54% of the Madison rental population. Modern-day tenants want to live in rental communities with state-ofthe-art features. These renters want dedicated co-working areas, fully appointed clubhouses with spacious kitchens, resort-style pools, walking trails, dog-friendly amenities, along with fully equipped fitness rooms that feature the latest and greatest fitness programs. Intelligently designed luxury apartments with a long list of features and amenities do not come cheaply. Once considered a relatively inexpensive place to live, Huntsville-Madison County appears to be catching up to the national average when it comes to rental prices. As of July 2021, the national average for rent was $1,482, which represented a 6.3% increase from July 2020. Since March 2019, the national average has been relatively stable, demonstrating a slight increase between March 2021 and July 2021. Comparing the rental figures between July 2020 and July 2021, the average rent in Huntsville rose from $904 to $1,021, representing a 13% increase. The biggest jump was observed in the Madison rental market, where there has been a whopping 14.8% jump in the average rent, from $1,029 to $1,184. The graph demonstrates a steady increase from
March 2019 to July 2021, which indicates that the average rent increase was not entirely COVID-19 driven. Apartments ranging from $1,000 - $1,500 currently represent 41.8% of Huntsville rentals. In fact, 76.6% of Huntsville rental properties fall
By Lori Conners / Graphs by Lori J. Connors
into the $700-1500 range, with only 15.9% of rentals available in the $500-700 range. Huntsville rental prices are still a bargain, comparatively. In Madison, the picture is slightly different. 90.1% of all Madison rentals fall into the $700-1500 range, with 64.9% of rentals in the $1,000 - $1,500 range. There were no rentals listed at the $500-700 price point. As Huntsville-Madison County outpaces Birmingham in growth, quality of life, and average rent prices, it’s likely that rent will continue an upward trajectory, soon to equal the national average. Luxury apartment living in a community setting is predicted to be an ongoing trend, especially as Huntsville-Madison County continues to grow. The Alexandria Apartments in Madison and the Legacy at Jones
