Why Baldwin County's Inland Markets Are Set to Outshine Coastal Markets in 2024

Everyone wishes they had a crystal ball when it comes to predicting real estate markets, but alas, we only have the data available to us in the rearview mirror, analyzing the trends of the past in an effort to predict the future.  I took a couple days this week to dive into the 10 year trends of Baldwin County’s varied markets to give you the best insight to where things will be heading in 2025.  In the past, the coastal properties in Gulf Shores and Orange Beach have long been the draw for retirees, vacationers and investors seeking the beautiful white  sands and and laid back southern lifestyle of Alabama’s Gulf Coast which created a thriving coastal real estate market for the past decade. However, a quieter but significant shift is underway: Baldwin County's traditional suburban markets—like Fairhope, Daphne, Foley, and Loxley—are rapidly gaining ground and popularity over the coast, and in 2024, these areas are poised to outpace the beach markets in terms of sales, growth, and investment potential setting the stage to takeover in 2025. In fact the devlopment going on in Foley, Loxley and all along the Baldwin beach express is ripe for future growth and apreciation.  Here’s why:

Rising Costs? Buyers Are Saying ‘No Thanks’ to the Coast

With inflation on the rise and interest rates at their highest levels in years, many buyers are finding it increasingly difficult to afford the higher-priced homes and maintenance costs of the older construction more typical of coastal markets. In 2024, the cost of living has surged, driven by not only higher home prices but also escalating property taxes, insurance costs that have doubled and even tripled in some cases, and everyday expenses. As a result, a growing number of buyers are turning their attention inland to Baldwin County's suburban markets, where there are beautiful neighborhoods, plenty of new constrution to choose from, and they can find more affordable options without sacrificing quality of life.

Data Insight: While Gulf Shores saw its median home price rise to $487,335 in 2024, and Orange Beach skyrocketed to $725,000, suburban markets like Daphne ($353,000) and Loxley ($295,140) offer more attainable price points. This affordability is critical in a market where fewer buyers can stretch their budgets to afford coastal properties.

Builders Are Betting Big on the ‘Burbs

Here’s the deal: Builders are no fools. They’ve pivoted hard, focusing on smaller, more affordable homes—especially in Baldwin County’s suburbs. Why? Because that’s where the demand is hot. Rising construction costs and a shrinking pool of high-end buyers have builders flooding the market with homes that people can actually afford.

Homebuilders are responding to these economic pressures by shifting their focus to smaller, more affordable models.  If you tour any of the DR Horton neighborhoods for instance, you will likely notice that many of the neighborhoods which started construction 4-5 years ago, have a variety of larger floorplan homes in the initial phases, while all the new phases and new developments are what are known as the "express model" homes.  These homes are the smallest floorplans and most economical.   As construction costs rise and the buyer pool for high-end homes shrinks, builders are prioritizing the development of homes that meet the needs of budget-conscious buyers. This strategic pivot is flooding the s with new, competitively priced homes, which in turn attracts more buyers.

Data Insight: The steady price growth in suburban areas, with Fairhope’s median price increasing by 115.47% over the last decade, reflects this demand. As builders continue to supply the market with affordable homes, these areas are likely to see continued strong sales throughout 2024 and into 2025.

Suburban Markets Are Tightening Up—Fast

Let’s cut to the chase: homes in Baldwin County’s suburbs are flying off the market. Tight inventory and fierce competition mean prices are climbing, and buyers are scrambling to get in. On the flip side, coastal markets are starting to show cracks, with rising supply and slowing demand.

Baldwin County and the nearby city of Mobile are experiencing significant economic growth, driven by new industries, infrastructure projects, and business expansions. This economic boom is creating jobs and attracting a larger population to the area. As more people move to Baldwin County for work, they are seeking affordable housing which is more conveniently located in the county’s suburban markets. With strong job growth and an expanding population, these areas are becoming even more desirable, further driving demand for homes.

Data Insight: Gulf Shores might have seen some price jumps, but it’s also dealing with a volatile market, with months of supply bouncing up to 8.7 in 2024. Meanwhile, suburban hotspots like Daphne and Foley are keeping it tight, with much lower inventory and more stable price growth.

Economic Boom = Population Boom

Baldwin County and nearby Mobile are booming—new jobs, new industries, and new opportunities. And with that growth comes a flood of people looking for places to live. But here’s the kicker: they’re not all rushing to the beach. The smart money is heading inland, where job growth and economic expansion are driving up demand for housing.

As word is continuing to spread about the cost of living and lifestyle in lower Alabama, the inventory in these areas remains tight, fueling competition and driving up prices. We continue to see a migration from more highly populated areas from people seeking refuge and a change of pace drawn to the culture of the south. There is still plenty of land to develop, as Baldwin County is approximately the same size as the state of Delaware!  so this trend is likely to continue for years to come.  Here's a look at the months of supply for each area over the last decade

• Fairhope: The months of supply decreased significantly from 7.4 months in 2014 to 4.4 months in 2024. A sharp drop was observed between 2017 and 2021, with the supply falling from 7.1 months to 3.5 months.
• Daphne: Daphne saw a drop from 4.7 months in 2014 to a low of 2.3 months in 2022 and 2023, before slightly rising to 3.4 months in 2024.
• Spanish Fort: Spanish Fort experienced a dramatic decline from 12.8 months in 2016 to just 2.4 months in 2021. The supply increased slightly to 3.7 months by 2024.
• Loxley: Loxley’s months of supply dropped from 10.4 months in 2016 to 2.7 months in 2024.
• Foley: Foley saw its supply decrease from 6.3 months in 2014 to 2.6 months in 2023, before rising slightly to 4.3 months in 2024.

Suburbs Are the Smart Bet for 2025

Following the pricing trends over the last decade, the coastal market has shown more price volatility. For instance, Gulf Shores saw a dip around 2017 before recovering, indicating that coastal properties are more sensitive to external factors, such as economic shifts or changes in tourism patterns. Becuase of the uncertainty of today's market, we could be seeing this same trend happning again in 2025.  Already the months of supply is double many of the inland Baldwin County markets.  While the traditional market areas, particularly Fairhope and Daphne, have shown steadier growth without significant dips, suggesting a more stable and predictable market. This stability is likely to be increasingly appealing for homebuyers who have Alabama on their radar as a place to relocate or invest.

Trend Overview:

• Gulf Shores: The supply in Gulf Shores fluctuated over the decade, starting at 7.0 months in 2014, dropping to 3.7 months in 2021, but then spiking to 8.7 months in 2024.
• Orange Beach: Orange Beach saw similar volatility, with a significant increase in supply from 4.7 months in 2020 to 9.8 months in 2024.

The Market’s Evolution: A Complex Reality

While overall sales numbers might suggest a slowdown in Baldwin County, the truth is more complex. The broader market may show signs of cooling, but this doesn’t tell the whole story. The months of supply of the inland markets is far less than those on the coast and the trend over the past decade shows that it is likely to stay that way in the near future which should continue to lure those saavy buyers and investors who see the beauty, growth, and potential of our reale state market.

Gulf Shores:

Median Sale Price in July 2024: $487,335
10-Year Growth: 170.74% (from $180,000 in 2014 to $487,335 in 2024)
Price Fluctuations: Notable dips and rises, particularly a significant drop to $255,950 in 2018 before recovering strongly. Could we be positioned for a significant drop again this year?

Let’s face it: the coastal charm of Baldwin County is still there, but the smart money is on the suburbs. With rising costs making beachfront properties less appealing, and economic growth driving up demand in places like Fairhope and Daphne, it’s clear where the real opportunities lie. Don’t get left behind—2025 is the year to shift your focus inland, where Baldwin County’s suburban markets are ready to shine.

Given these factors—rising affordability concerns, builder trends favoring inland markets, increasing demand, and changing lifestyle preferences—Baldwin County's suburban real estate markets are set to outpace the coastal markets in 2025. For buyers seeking stability, affordability, and long-term growth potential, the suburbs offer a compelling alternative to the traditional allure of beachfront living. Whether you're an investor looking for the next big opportunity or simply staying informed about the market, it’s clear that the real estate landscape in Baldwin County is evolving, with suburban areas leading the charge.