Alabama's economy faring better than most

Alabama Foreclosure & Investor News

Article Abstract:  While Alabama foreclosures still remain high, the economy in general seems to be fairing quite well. Alabama created 3,000 new jobs while other states lost that many or more. For the full Alabama foreclosure and Economy report pleas continue below:

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Alabama's financial and real estate markets are doing better than most of the country, even adding 3,300 jobs this year while the nation lost four times that many, Marlon G. Cook, a regional manager in the Federal Deposit Insurance Corp. in Atlanta, told those at Tuesday's Coastal Economy Outlook conference at the Arthur R. Outlaw Mobile Convention Center.

The country entered a recession near the end of 2007, Cook said.

Cook stood in for his boss, FDIC Chairman Sheila Bair, who had to cancel a planned appearance. Bair remained in Washington, as lawmakers and regulators tried to salvage a $700 billion rescue plan for the nation's financial system.

More than 300 Realtors and bankers joined city and county officials from Mobile and Baldwin counties at the seminar hosted by the University of South Alabama's Mitchell College of Business and Center for Real Estate Studies.

Cook predicted mortgage credit would "remain under tremendous pressure until the end of the year and into 2009." But, he added, Alabama is doing "relatively well" compared to its neighbors in Florida and Georgia, and when compared to the nation.

"We find good news with ThyssenKrupp, which will bring in about 3,000 jobs," he said. The German steelmaker is building a $3.7 billion steel plant in north Mobile County that is set to open in 2010.

"Volkswagen is going to Chattanooga, and many of those suppliers will open businesses in Alabama," said Cook. "We see prospects for growth in manufacturing," in Alabama.

Consumer spending is better in Alabama than in the rest of the Southeast, according to Cook. And while home prices have declined statewide, the market remains positive because of the affordability of housing, he said.

The median price of a home in Alabama was $134,946 in August, according to the Alabama Center for Real Estate at the University of Alabama. In Baldwin County, that number was $190,000 and in Mobile, $137,000, according to local Realtor groups.

Mortgage credit conditions are not as tight in Alabama as in many other states, he said. For example, there were 56,000 subprime mortgages as of June 30, with 1,800 of them the two- and three-year hybrid loans that caused much of the mortgage and foreclosure problem, according to Cook. Another 2,500 of those 56,000 loans are expected to reset in 2009, he said.

"These numbers are so low, and that's good for the state," he said. Still with 35 percent of the subprime loans made in Birmingham, Cook said the FDIC is keeping an eye on Alabama's largest city as "a potential area of credit distress."

He said 11 percent of the subprime loans were issued in Mobile.

 

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