Mobile, Alabama, 2009
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COMPREHENSIVE HOUSING MARKET ANALYSIS Mobile, Alabama U.S. Department of Housing and Urban Development Office of Policy Development and Research As of January 1, 2009 Summary Economy of which will be met by the 250 units currently under construction (see The Mobile HMA is a Gulf Coast Table 1). Housing Market Area port and distribution center. Ship- building and chemical manufacturing Rental Market are also leading industries in the area. During 2008, nonfarm payrolls in the The rental housing market softened HMA increased by about 1,300 jobs, somewhat in 2008 but remains rela- or 0.7 percent, to 184,600 jobs. Al- tively balanced. The current vacancy though job growth has slowed recently, rate is estimated at 8 percent. The market Washington Greene the manufacturing and service-providing tightened significantly after Hurricane sectors are projected to expand. Thyssen Katrina, but a rise in multifamily con- Mississippi Krupp AG is currently building a struction increased the supply of rental Alabama George Mobile units. Multifamily construction has Baldwin $4.2 billion steelmaking facility that is expected to create 2,700 jobs when it remained strong in the past 3 years, and Jackson is completed in 2010, and other manu- roughly 1,200 units are currently under facturing industries are expected to construction or in the development expand as well. Nonfarm employment pipeline. These units will meet all the is forecast to increase by 1.3 percent a expected demand during the forecast The Mobile, Alabama Housing year during the next 3 years. period (see Table 1). Market Area (HMA) consists of Mobile County, which is located Sales Market Table 1. Housing Demand in the on the western side of Mobile Bay Mobile HMA, 3-Year on the Gulf of Mexico. The city of The Mobile sales housing market is Forecast, January 1, 2009 Mobile was founded as a French currently soft, due to slower job growth to January 1, 2012 colony at the mouth of the Mobile and tight lending standards. From Mobile HMA River in 1702. The city of Mobile 2007 to 2008, home sales declined Sales Rental has developed into a major port 20 percent and the average sales price Units Units and manufacturing center with a for existing homes fell 2.6 percent. Total Demand 4,100 1,200 population of more than 400,000. In response to declining sales, single- Under 250 1,200 family home construction declined by Construction one-third from 2007 to 2008. During Notes: Total demand represents estimated production necessary to achieve a balanced the next 3 years, demand is expected market at the end of the forecast period. Units Market Details for 4,100 new sales units, a portion under construction as of January 1, 2009. Source: Estimates by analyst Economic Conditions ...............2 Population and Households .....5 Housing Market Trends ............6 Data Profile ...............................9 2 Economic Conditions he city of Mobile is a major $2 billion a year on the HMA. Table 2 Tport on the Gulf of Mexico and lists major employers in the HMA. a hub for shipping and warehousing, Currently, nonfarm employment with several rail and barge lines serving in the Mobile HMA is only slightly the area. In addition, the city is at the above the average level recorded junction of Interstate 10 (I-10) and the during 2000. The recession of 2001 southern terminus of I-65. In 2006, caused a significant drop in employ- the Port of Mobile handled nearly ment. Nonfarm payrolls in the HMA 60 million tons of cargo, making it fell from approximately 180,000 jobs the 10th largest port by volume in the in 2001 to 169,500 jobs in 2004, a United States. decline of 1.7 percent a year. Manu- Shipbuilding and chemical manufac- facturing was particularly hard hit, turing are also important industries in losing a total of approximately the Mobile HMA economy; together, 4,700 jobs during the period. Begin- they accounted for approximately ning in 2005, nonfarm employment one-third of all manufacturing em- in the HMA began to increase again, ployment in the area, or more than growing by an average of 2 percent, 5,500 jobs in 2008. In addition, the or 4,200 jobs, a year through 2007. HMA is a regional center for health Figure 1 shows employment growth care and retail trade in southern by sector in the HMA from 1990 to Alabama. Leading employers include the current date. the Mobile Infirmary Medical Center, In the past year, employment has the University of South Alabama continued to expand but at a slower (USA) and USA Health System, and pace due to the national recession. COMPREHENSIVE HOUSING MARKET ANALYSIS Wal-Mart Stores, Inc., with 5,800, From 2007 to 2008, nonfarm em- 5,000, and 3,000 employees, respec- ployment in the HMA increased tively. According to USA officials, A L • by about 1,300 jobs, or 0.7 percent, enrollment at the university has to 184,600 jobs. During 2008, the increased steadily in the past 10 years average unemployment rate was to more than 14,000 students as of the 5 percent, up from 3.6 percent M o b i l e , fall of 2008, and the university and its during 2007 (see Figure 2). affiliated healthcare facilities have an economic impact of approximately Despite a weak housing market, con- struction activity has expanded in the Table 2. Major Employers in the Mobile HMA past year. During 2008, employment Name of Employment Number of in the mining, logging, and construc- Employer Sector Employees tion sector increased by about 600 jobs, Mobile Infirmary Medical Center Education & Health Services 5,800 or 4 percent. Although the pace of University of South Alabama (USA) and Education & Health Services 5,000 residential construction has fallen USA Health System Wal-Mart Stores, Inc. Trade 3,000 significantly, the decline has been more Providence Hospital Education & Health Services 1,575 than offset by growth in nonresidential Springhill Medical Center Education & Health Services 1,375 building activity, particularly indus- ST Mobile Aerospace Engineering, Inc. Manufacturing 1,300 Austal USA Manufacturing 1,025 trial and warehouse construction. In Regions Financial Corporation Financial Activities 900 addition, from 2005 to 2008, the Port U.S. Coast Guard Government 875 of Mobile underwent a $300 million Atlantic Marine Manufacturing 850 expansion. In 2008, employment in Source: Mobile Area Chamber of Commerce Economic Conditions Continued 3 the transportation and utilities sector services sectors both added about increased by about 500 jobs, or 5.3 per- 200 jobs, an increase of 0.9 percent cent, compared with employment levels each. The slowing economy is taking recorded a year earlier (see Table 3). a toll on some sectors, however. During the past year, employment in Many of the service-providing sectors the wholesale and retail trade sectors continue to grow as well in response declined by a total of about 600 jobs, to the demands of an expanding popu- or 1.9 percent. Figure 3 shows current lation. In 2008, employment in the employment by sector in the HMA. leisure and hospitality sector increased by about 400 jobs, or 2.6 percent, Employment in the manufacturing while the professional and business sector is expected to increase during services and the education and health the next 3 years. The German firm Figure 1. Sector Growth in the Mobile HMA, Percentage Change, 1990 to Current Total Nonfarm Employment Goods Producing Natural Resources, Mining, & Construction Manufacturing Service Providing Wholesale & Retail Trade Transportation & Utilities Information Financial Activities Professional & Business Services COMPREHENSIVE HOUSING MARKET ANALYSIS Education & Health Services Leisure & Hospitality A L • Other Services Government – 20 – 10 0 10 20 30 40 50 60 70 80 90 M o b i l e , Note: Current is based on 12-month averages through December 2008. Source: U.S. Bureau of Labor Statistics Figure 2. Trends in Labor Force, Resident Employment, and Unemployment Rate in the Mobile HMA, 1990 to 2008 220,000 10.0 210,000 8.0 200,000 190,000 6.0 180,000 170,000 4.0 Labor Force & Labor Force Unemployment Rate Resident Employment 160,000 2.0 150,000 140,000 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Labor Force Resident Employment Unemployment Rate Source: U.S. Bureau of Labor Statistics Economic Conditions Continued 4 ThyssenKrupp AG is currently workforce by about 1,000 jobs over building a $4.2 billion advanced the next 2 years. steel production facility near the city Due to the current recession, job of Mobile that will employ about growth is expected to remain weak 2,700 workers beginning in 2010. for the next 12 to 18 months. Begin- Northrop-Grumman Corporation has ning in 2010, however, with new announced plans for a $600 million manufacturing activity starting and plant in the city of Mobile to build with continued expansion in the refueling aircraft for the U.S. Air service-providing sectors, job growth Force. This facility is expected to is expected to accelerate. Overall, add as many as 2,500 jobs during the during the next 3 years, nonfarm next 3 years. Area shipbuilder Austal employment in the HMA is expected USA is currently developing next- to increase by about 2,500 jobs, or generation combat ships for the U.S. 1.3 percent, a year. Navy and plans to increase its local Table 3. 12-Month Average Employment in the Mobile HMA, by Sector 12 Months 12 Months Ending Ending Percent December December Change 2007 2008 Total Nonfarm Employment 183,300 184,600 0.7 Goods Producing 31,300 32,000 2.2 Natural Resources, Mining, & Construction 15,100 15,700 4.0 Manufacturing 16,200 16,400 1.2 Service Providing 152,100 152,600 0.3 Wholesale & Retail Trade 31,800 31,200 – 1.9 Transportation & Utilities 9,500 10,000 5.3 COMPREHENSIVE HOUSING MARKET ANALYSIS Information 2,400 2,500 4.2 Financial Activities 9,400 9,500 1.1 Professional & Business Services 23,000 23,200 0.9 A L • Education & Health Services 23,300 23,500 0.9 Leisure & Hospitality 15,500 15,900 2.6 Other Services 9,200 9,200 0.0 Government 27,900 27,700 – 0.7 M o b i l e , Notes: Based on 12-month averages through December 2007 and December 2008.