Alabama’s ‘Magic City’ Emerges as Hottest Market for Investor Homebuyers

Investors are still snapping up properties despite high mortgage rates—but it might surprise you where. Along with investing hotspots like Miami and New York, some of the most popular areas for real estate investors to buy—and hold—are mid-sized Midwest and Sun Belt cities.

Among the top 50 metro areas, Birmingham, AL had the highest net share of investor homebuyers in 2025, according to the Realtor.com economic research team's latest investor report.

Known as the 'Magic City' for its rapid growth as an iron and steel boomtown in the late 19th century, Birmingham boasts low home prices and solid rents that make the town attractive to investors.

Around 21% of home sales in Birmingham were to investors last year, while around 14.4% of homes sold in the area were sold by investors. That put the net share of investor home purchases at +6.6%, the highest of any major metro. The top ten list includes:

• Birmingham, AL 6.60%
• Memphis, TN 6.20%
• Kansas City, MO 5.70%
• St. Louis, MO 4.60%
• Pittsburgh, PA 4.40%
• Columbus, OH 4.30%
• Miami, FL 4.20%
• New York NY 3.40%
• Cleveland, OH 3.40%
• Salt Lake City, UT 3.10%

"Seven of the metros — Memphis, Birmingham, Kansas City, St. Louis, Pittsburgh, Columbus, and Cleveland — are classic cash-flow markets where affordable entry prices, climbing rents, landlord-friendly tax environments, and durable renter demand attract investors," says Realtor.com Senior Economist Hannah Jones. "Miami and New York are outliers driven by big investors buying in because prices are expected to keep rising and it's easy to sell later, rather than to earn steady rental income."

What is it about Birmingham that's made it such a popular market for investors? Well, the price is right, for one.

"In Birmingham, the money is in the rent check, not the resale," says Cameron Walker, real estate expert at Clever Real Estate. "That's the whole story of why investors hold."

The median listing price for homes in Birmingham is $160,000, while the median monthly rent is $1,300.

An investor able to put 20% down on a $160,000 property would have a mortgage payment of $1,067 per month, so theoretically they could easily profit while charging a competitive rent.

"In overheated markets, investors are motivated to make purchases because they believe that this way they are going to receive a higher appreciation and then try to get decent rental yields just to pay the note," says Walker. "However, in Birmingham it's quite the other way around. Investors try to obtain decent yields right now, and the appreciation in their investment opportunities is a bonus which, shows up during the process of holding a deal for 5 or 10 years." 

Birmingham's market is slow-growing, so it doesn't make sense to try to rapidly flip a property there, as it would in faster-growing markets like Jacksonville, FL, or Hartford, CT.

For eager investors, there's also a glut of housing on the market in Birmingham—there are currently more than 2,100 active listings in the area (compare that to Hartford, where there are only 214 homes on the market right now).

What else makes Birmingham an attractive option for investor-buyers? Alabama has some of the lowest property taxes in the country. Plus, with the University of Alabama at Birmingham school and hospital system in the city, there's a steady stream of potential tenants cycling through the area.

Walker says investors looking at Birmingham shouldn't expect huge changes there over the next couple of years. Instead, they'll see a slow appreciation in property prices.

Read on to see the top ten cities where investors are buying and holding on to properties this year.

1. Birmingham, AL

Median Listing Price: $160,000
Investor Purchases: 5,339
Share of Investor Buyers: 21%
Investor Buyer Median Purchase Price: $206,000
Share of Investor Sellers: 14.4%
Percent of Investor Buyers Holding Properties: 6.6%

2. Memphis, TN

Median Listing Price: $167,000
Investor Purchases: 4,617
Share of Investor Buyers: 23.7%
Investor Buyer Median Purchase Price: $126,000
Share of Investor Sellers: 17.5%
Percent of Investor Buyers Holding Properties: 6.2%

3. Kansas City, MO-KS

Median Listing Price: $270,000
Investor Purchases: 9,810
Share of Investor Buyers: 21.2%
Investor Buyer Median Purchase Price: $250,000
Share of Investor Sellers: 15.50%
Percent of Investor Buyers Holding Properties: 5.7%

4. St. Louis, MO-IL

Median Listing Price: $210,000
Investor Purchases: 11,431
Share of Investor Buyers: 21.1%
Investor Buyer Median Purchase Price: $130,000
Share of Investor Sellers: 16.5%
Percent of Investor Buyers Holding Properties: 4.6%

5. Pittsburgh, PA

Median Listing Price: $269,000
Investor Purchases: 2,940
Share of Investor Buyers: 10.1%
Investor Buyer Median Purchase Price: $110,000
Share of Investor Sellers: 5.7%
Percent of Investor Buyers Holding Properties: 4.4%

6. Columbus, OH

Median Listing Price: $289,000
Investor Purchases: 4,170
Share of Investor Buyers: 13.4%
Investor Buyer Median Purchase Price: $225,000
Share of Investor Sellers: 9.1%
Percent of Investor Buyers Holding Properties: 4.3%

7. Miami-Fort Lauderdale-West Palm Beach, FL

Median Listing Price: $639,000
Investor Purchases: 13,164
Share of Investor Buyers: 14.7%
Investor Buyer Median Purchase Price: $460,000
Share of Investor Sellers: 10.5%
Percent of Investor Buyers Holding Properties: 4.2%

8. New York-Newark-Jersey City, NY-NJ

Median Listing Price: $950,000
Investor Purchases: 15,662
Share of Investor Buyers: 10.50%
Investor Buyer Median Purchase Price: $680,000
Share of Investor Sellers: 7.1%
Percent of Investor Buyers Holding Properties: 3.4%

9. Cleveland, OH

Median Listing Price: $145,000
Investor Purchases: 4,192
Share of Investor Buyers: 15%
Investor Buyer Median Purchase Price: $115,000
Share of Investor Sellers: 11.6%
Percent of Investor Buyers Holding Properties: 3.4%

10. Salt Lake City-Murray, UT

Median Listing Price: $575,000
Investor Purchases: 2,029
Share of Investor Buyers: 13.5%
Investor Buyer Median Purchase Price: $$500,000
Share of Investor Sellers: 10.4%
Percent of Investor Buyers Holding Properties: 3.1%