Property values increase in Vestavia Hills

Statistics show that property values in the city of Vestavia Hills are on the rise in recent years.

The Birmingham Association of Realtors provided market stats for the past five years for the zip codes that encompass the city: 35216, 35226, 35242 and 35243.

For the 35216 zip code, which encompasses much of U.S. 31 and what is largely considered “old Vestavia,” along with parts of Hoover, the average home price in 2016 was $326,852. In 2020, year to date, the average home price was $392,507, a 20% increase over four years.

For the 35226 zip code, which encompasses the Columbiana Road portion of Vestavia, along with portions of Hoover and Homewood, the average home price was $288,376, compared to $362,703 this year, a 25% increase.

For the 35243 zip code, which encompasses Cahaba Heights and some of the Rocky Ridge area, the average home price rose from $383,031 in 2016 to $436,388 this year, a 14% increase.

The only zip code to see a slight decrease was 35242, which encompasses Liberty Park. The decrease was minimal, a .35% decrease from $597,575 in 2016 to $595,452 this year.

The rising property values have a positive impact on funds going to both the city and the Vestavia Hills school system.

While the city has nothing to do with home appraisals, City Manager Jeff Downes said the rising home values can be linked to supply and demand.

“Vestavia Hills is a highly sought-after place,” Downes said.

Homes don’t last long on the market, often selling within days, he said. At the moment, there is more demand than there is supply. “We are in a unique situation as a city,” Downes said. “Vestavia and Mountain Brook do not rely primarily on sales tax. There’s a balance in revenues.”

Downes said that allows the city to be stable in times of crisis, including during the ongoing COVID-19 pandemic.

From 2016 to 2020, the city’s ad valorem revenues increased from about $12.9 million to $15.8 million.

It isn’t a secret why families often move to Vestavia Hills. The city has one of the most well-regarded school systems in the state, and that is the No. 1 reason families move here, Downes said. Because of that, the school system receives the largest portion of ad valorem taxes.

The school system’s property tax revenues rose from about $34 million in 2016 to about $42 million this year.

The school system’s chief financial officer, Courtney Brown, said the increases over the years were due to higher valuations, but that increase hasn’t led to much higher budgets.

“We normally budget pretty conservatively for revenues,” Brown said.

Brown said most years, they only budget a 2% increase at most, just in case. However, the increase in tax revenues does provide a much-needed cushion. In the past, with the cost of inflation and the building of two new school campuses, there wasn’t much in the way of reserves. This year, the school system used the increase of funds to help with expenses related to COVID-19, Brown said.