BY IVANNA C. SUKKAR JENNIFER E. GARRET T
Spotlight: alabama
alaBama may Be a SWee T home To i TS 4. 8 million reSiden TS, Bu T The “hear T oF dixie”
iS STruggling.
Although the state gross domestic product (GDP) increased 2 percent in 2010, its growth was below the Southeast’s regional average of 2.3 percent and the national rate of 2.6 percent. In addition,
Alabama’s GDP decreased by more than 3 percent in the two years previous, according to the U.S.
Bureau of Economic Analysis.
Budget issues are a driving concern across the state. The 2013 state budget may face a shortfall of
as much as $400 million dollars, with no easy answer as to where to locate the funds. This past fall,
jefferson County, which includes the state’s largest city in Birmingham, filed for bankruptcy. The county
owes more than $3 billion because of a failed sewer deal, and it may end up as the largest municipal
bankruptcy in U.S. history.
There are some signs of improvement, however. Unemployment is decreasing, and Alabama’s per capita personal income increased 3. 4 percent from 2010 to 2011. In addition, this past first quarter, sales
for Alabama-built cars increased 4 percent over 2011, indicating an increase in demand for output from
the state’s Mercedes-Benz, Honda and Hyundai factories. The residential market is beginning to reflect
these improvements, with new home sales increasing 9.2 percent this past March over March 2011.
home sales and prices
alaBama home SaleS and median SaleS price
Although still well off 2007 peaks,
the housing market in Alabama is
beginning to pick up again, as evidenced by recent figures from the
Alabama Center for Real Estate at
the University of Alabama. Housing
sales this past March totaled 3,374
units, an 8.77 percent increase
over the 3,102 sales in March 2011.
$105,000
$110,000
$115,000
$120,000
$125,000
$130,000
$135,000
0
1,000
2,000
3,000
4,000
5,000
6,000
The median sales price in the state
also increased 6. 28 percent year
over year, from $111,289 in March
’ 11 to $118,280 this past March.
Source: Alabama Center for Real Estate
March’07 March’08 March’09 March’ 10 March’ 11 March’ 12
Median sales price Home sales
Despite these encouraging signs, the average time a home stays on the market in Alabama increased
from 156 days in March ’ 11 to 161 days this past March.
mortgage delinquencies
This past first quarter, the delinquency rate for mortgage loans on
residential properties in Alabama
was 8.81 percent, according to the
Mortgage Bankers Association
(MBA). Although this is more than
the national rate of 6.94 percent, it is
an improvement over the 10. 32 percent posted in fourth-quarter 2011.
alaBama mor Tgage delinquencieS, FirST-quar Ter 2012
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
The percentage of loans in foreclosure in Alabama was 2.04 percent
this past first quarter, however,
which ranked it 42nd out of the
50 states plus Washington, D.C., MBA reports. The national rate of loans in foreclosure this past first
quarter was 4. 39 percent.
Source: Mortgage Bankers Association *Includes: AL, Ky, MS, TN
Total past due 30 days 60 days 90-plus days
Alabama East South Central Region* U.S.
3 Cities to Watch
HuNTSVILLE
The Redstone Arsenal, Cummings Research Park
and NASA’s Marshall Space Flight Center are
at the heart of Huntsville’s technology-driven
economy. The area’s unemployment rate was
only 6. 3 percent this past March. The Huntsville-Madison County area had an average home sale
price of $178,976 this past April.
MONTGOMERy
The state’s capital city is a regional distribution
hub and home to Hyundai Motor Manufacturing Alabama, which plans to add 877 jobs with
a third shift this fall. Home sales in Montgomery increased 16 percent year over year this past
March. The median sales price in the city this
past March was $120,150.
TuSCALOOSA
Anchored by the University of Alabama, Tuscaloosa is also home to Stillman College and Shelton State Community College. The quiet town
was named the “most livable” city by the U.S.
Conference of Mayors this past year, but on April
27, 2011, a deadly tornado destroyed 12 percent
of the city. Rebuilding efforts are under way but
may take as long as five years.
WHAT THE LOCALS SAy
unemployment
From March 2011 to this past March, the unemployment rate in Alabama has dropped two percentage points, from 9. 3 percent to 7. 3 percent. The national rate was 8.2 percent this past March.
After peaking at 10. 6 percent in the final four months of 2009, Alabama’s unemployment rate
slowly decreased until it began to pick up speed in September ’ 11. The decrease is partially attributed to the addition of more than 41,000 jobs this past year, but economists note that thousands
of people stopped looking for work, as well.
“Birmingham right now is starting to boom again.
We have pockets that have been hit harder than
others. Much of Central Alabama is anchored
by the medical community, which has been very
strong for us. Home prices are stabilizing, and
I’m having a lot more activity on purchase business. We’ve had some pent-up demand. I feel
like the climate has changed, and people appear
to be responding differently to the market.”
— BEN CHENAuLT, REGIONAL MANAGER,
fAIR WAy INDEPENDEN T MOR TGAGE CORP.
jennifer E. Garrett is editor of Scotsman Guide. Reach her at (800) 297-6061 or jenniferg@scotsmanguide.com.
Sources: Al.com, Alabama Center for Real Estate at the University of Alabama,
Alabama Department of Industrial Relations, Birmingham Business Journal,
CBS News, Mortgage Bankers Association, U.S. Bureau of Economic Analysis,
U.S. Department of Labor, The Wall Street Journal
