What are the Top Ranked Metro Areas to Live in Alabama?

When looking for a place to live there are many factors that go into this major decision. Some elements are based on individual preference; others are broadly desired by most people.  We’ve ranked the top MSA markets in Alabama based on 5 key determinants. These include: median family income, Alabama Housing Affordability Index, average school score, violent crimes per 100,000 residents, and effective property tax rates. As a result of these metrics we were able to derive weighted and unweighted rankings for the state. On our weighted rankings, we applied the largest weights of 30 percent to median family income and the average school score. The Alabama Housing Affordability Index which is the ratio of the median family income for Alabama to the income required to purchase the median priced home for the state; this carried a 20 percent weight in our research. Violent crimes per 100,000 residents received a 15 percent weight. Lastly, property taxes in Alabama are significantly lower than the national average, so this metric carries the lowest weight in the rankings.

Coming in first with the highest median family income for the past year is Huntsville $78,700. Which also leads the state in new construction activity. The $7,700 gap between #1 and #2 in the median family income rankings is the largest difference in the state, with Birmingham coming in at $71,000. Daphne-Foley-Fairhope is a very close 3rd place with a median family income of $69,400 up 12.85 percent from last year. In 4th place with the largest year over year change of 13.01 percent is Auburn-Opelika at $66,900. Lastly, in 5th place with a median family income of $62,900 is Montgomery.

Along with the median family income, the average school score also carries the largest weight. In first place again is Huntsville with an average district school score of 83.8. Within this district Madison City schools received the highest score of 95, and Huntsville City with the lowest of 75.

For second place in the average school score rankings there is a tie between Daphne- Foley- Fairhope and Decatur, with a score of 82. Baldwin County schools received the highest score of 82 in Daphne-Foley-Fairhope, and Hartselle City Schools received the top score of 91 in the Decatur MSA. Coming in at a very close #4 is Auburn-Opelika with a score of 81.67, and Auburn City schools obtaining the top score of 89. Arriving at #5 with an average score of 81.13, is the Birmingham-Hoover MSA. Despite the ranking, the Birmingham-Hoover MSA has the largest concentration of A rated school districts in the state. The highest overall ranked school district, Mountain Brook City schools with a score of 98, is found in the Birmingham metro area.

The Alabama Housing Affordability Index is comprised of current interest rates, median family income, and median sales price. An Affordability Index score of 100 means that a family earning the median family income has just enough income to qualify for a loan to purchase a median priced home in the area. For example, the Affordability Index of 186.8 for the state of Alabama in Q2 means that a family earning the median family income of $60,200 had 1.86 times the required income to qualify for a mortgage to purchase the median priced home in the state. Leading the way as the most affordable MSA is Anniston-Oxford-Jacksonville with an Index score of 222.4 which is down 6.52 percent from Q1. Gadsden comes in as the second most affordable MSA in the state with an index score of 214.7. Next in the Affordability Index is Montgomery with a score of 212.6 which is down 5.64 percent from Q1. Coming in 4th place, very closely with Montgomery is Florence- Muscle Shoals at 212.3. Finally, in 5th place in the Affordability Index is Mobile at 209. These rankings stand out specifically because the top 4 markets with the highest median family income are all in the bottom half of the Affordability Index rankings. The explanation for this is each of these top 4 markets: Huntsville, Daphne-Foley-Fairhope, Auburn-Opelika, and Birmingham-Hoover, all have median home prices above $200,000.

The next element researched for our rankings is the rate of violent crimes per 100,000 residents. Based on the FBI crime reporting program these offenses involve force or the threat of force. The top 5 rankings for lowest number of violent crimes are as follows: Decatur (192), Daphne-Foley-Fairhope (217), Auburn-Opelika (275), Birmingham-Hoover (325), Dothan (353). All of these areas fall below the national average of 394. However, the number of violent crimes per 100,000 for the state of Alabama (524) is higher than the national average (394).

Lastly, we assessed the average effective property tax rate for all metro areas in the state. According to the U.S. Census Bureau; Tax Foundation, Alabama ranks 49th in the country with an average property tax rate at 0.43 percent. The top 3 metro areas in the state each have property tax rates below the state average. Daphne-Foley-Fairhope leads the way with an effective property tax rate of 0.36 percent. Dothan comes in second place with an effective property tax rate of 0.39 percent. Florence- Muscle Shoals and Montgomery are separated by just one basis point at 0.42 percent and 0.43 percent respectively. Finally, one basis point above the state average property tax rate is Decatur at 0.44 percent.

The following tables demonstrate the complete weighted and unweighted rankings for the state. For further information about the methodology for these rankings click here.