Birmingham, AL 35242 Real Estate Market Report

ZIP Code: 35242
Report Date: February 2026
Market Temperature: NEUTRAL
Scope: Single-Family Residential (SFR) listings and comps only

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Executive Overview

As of February 2026, the Birmingham market, specifically in the 35242 area, has a median sold price of $519,900, reflecting the actual transaction activity and providing a clearer picture of market dynamics. The market appears to be stabilizing, with a neutral temperature suggesting a balanced environment where buyer and seller expectations are aligning. The median listing price stands at $617,450, indicating a notable gap that may create pricing friction as buyers navigate their options amidst elevated inventory levels.

The median days on market is 133, suggesting a slower sales velocity, which may indicate that buyers are taking more time to make decisions in the current market landscape. With a median price per square foot of $202.77, the market shows signs of moderation, and the overall conditions suggest that buyers are gaining negotiation power. The property tax rate of 0.48% further contributes to the investment appeal of the area, although the moderate interest rate pressure, with current mortgage rates averaging 6.01%, may still influence buyer sentiment and affordability.

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Market Overview

This analysis is based on a sample of properties from this ZIP code (up to 200 sold properties and up to 100 active properties). The median prices below are calculated from all available properties in the sample, while trend analysis uses properties from the selected analysis window.

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Market Metrics

Note: The property counts shown above represent only the properties analyzed in this report sample, not the total inventory for this ZIP code. Median prices are calculated from all available properties in the sample, while trend analysis uses properties from the selected analysis window.

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Rental Market

Note: The relationship between property values and rental rates reflects different market dynamics. Higher-priced properties may have lower rental yields due to factors such as luxury market positioning, owner-occupancy preferences, or long-term appreciation strategies rather than immediate rental income maximization.

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Property Taxes

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Liquidity & Velocity

Note: A Sale-to-List Ratio near 100% can occur when properties sell at or near their final listing price after price adjustments during the listing period, even when initial listing prices differ significantly from sale prices.

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Market Trends & Context

Understanding Market Temperature

A Neutral market indicates balanced conditions where neither buyers nor sellers have a strong advantage, typically characterized by flat price trends, extended but stable days on market, and moderate inventory relative to sales.

Current Mortgage Rate Context

Market-level mortgage rate comparison for this area:

Current 30-year fixed mortgage rates in the Birmingham, AL market average around 6.01% as of mid-February 2026, which is 0.84% lower than the 6.85% average seen one year prior.

Note: Interest rate comparisons provide market context. The existing "Interest Rate Pressure" metric above shows the qualitative market impact.

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Key Findings

1. The median sold price of $519,900 indicates a stable market reflecting actual transaction values, while the median listing price of $617,450 suggests potential pricing friction.

2. With 133 days on market, the area is experiencing slower sales velocity, which may indicate a cautious buyer approach in the current market environment.

3. The median price per square foot stands at $202.77, suggesting a moderate pricing structure that aligns with current buyer expectations and market conditions.

4. The market temperature is neutral, indicating balanced conditions where buyer and seller expectations are aligning without significant pressure on either side.

5. Current mortgage rates at 6.01% represent a moderate interest rate pressure, which may affect buyer affordability and overall market liquidity.

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Notable Properties

The following 8 properties represent notable market examples and recent transactions that illustrate key market dynamics. These are illustrative examples selected for their significance (top sales, market benchmarks, quick sales) and are not the basis for the statistical calculations shown above.