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 M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 2 Table 2. Source: Mobile Area Chamber ofCommerce Mobile InfirmaryMedicalCenter University ofSouthAlabama(USA)and Wal-Mart Stores, Inc. Providence Hospital Springhill MedicalCenter ST MobileAerospace Engineering,Inc. Austal USA Regions FinancialCorporation U.S. CoastGuard Atlantic Marine USA HealthSystem Economic Conditions
Major EmployersintheMobileHMA Employer Name of Education &HealthServices Education &HealthServices Trade Education &HealthServices Education &HealthServices Manufacturing Manufacturing Financial Activities Government Manufacturing T economic impactofapproximately affiliated healthcarefacilitieshavean fall of2008,andtheuniversityits to morethan14,000studentsasofthe increased steadilyinthepast10years enrollment attheuniversityhas tively. AccordingtoUSAofficials, 5,000, and3,000employees,respec Wal-Mart Stores,Inc.,with5,800, (USA) andUSAHealthSystem, the UniversityofSouthAlabama the MobileInfirmaryMedicalCenter, Alabama. Leadingemployersinclude care andretailtradeinsouthern HMA isaregionalcenterforhealth 5,500 jobsin2008.Inaddition,the ployment inthearea,ormorethan one-third ofallmanufacturingem they accountedforapproximately the MobileHMAeconomy;together, turing arealsoimportantindustriesin Shipbuilding andchemicalmanufac United States. the 10thlargestportbyvolumein 60 milliontonsofcargo,makingit the PortofMobilehandlednearly southern terminusofI-65.In2006, junction ofInterstate10(I-10)andthe the area.Inaddition,cityisat with several rail and barge lines serving a hubforshippingandwarehousing, Employment port ontheGulfofMexicoand he cityofMobileisamajor Sector Employees Number of 5,800 5,000 3,000 1,575 1,375 1,300 1,025 900 875 850 - - - expansion. In2008,employment in of Mobileunderwenta$300million addition, from2005to2008, the Port trial andwarehouseconstruction.In building activity,particularlyindus than offset by growth in nonresidential significantly, the decline has been more residential constructionhasfallen or 4percent.Althoughthepaceof tion sector increased by about 600 jobs, in themining,logging,andconstruc past year.During2008,employment struction activityhasexpandedinthe Despite aweakhousingmarket,con- during 2007(seeFigure2). 5 percent,upfrom3.6percent average unemploymentratewas to 184,600jobs.During2008,the by about1,300jobs,or0.7percent, ployment intheHMAincreased From 2007to2008,nonfarmem- pace duetothenationalrecession. continued toexpandbutataslower In thepastyear,employmenthas the currentdate. by sectorintheHMAfrom1990to Figure 1showsemploymentgrowth or 4,200jobs,ayearthrough2007. growing byanaverageof2percent, in theHMAbegantoincreaseagain, ning in2005,nonfarmemployment 4,700 jobsduringtheperiod.Begin losing atotalofapproximately facturing wasparticularlyhardhit, decline of1.7percentayear.Manu in 2001to169,500jobs2004,a fell fromapproximately180,000jobs ment. NonfarmpayrollsintheHMA caused asignificantdropinemploy during 2000.Therecessionof2001 above theaveragelevelrecorded in theMobileHMAisonlyslightly Currently, nonfarmemployment lists majoremployersintheHMA. $2 billion a year on the HMA. Table 2 - - - - - M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 3 Source: U.S.Bureau ofLaborStatistics Figure 2. Source: U.S.BureauofLaborStatistics Note: Currentisbasedon12-monthaveragesthroughDecember2008. Figure 1. – 20 Labor Force & Resident Employment 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 Economic Conditions – 10
SectorGrowthintheMobileHMA,PercentageChange,1990toCurrent Trends inLaborForce,ResidentEmployment,andUnemployment RateintheMobileHMA, 1990 to2008
1990 0
1991
1992 10
1993 Continued 20 Labor Force
1994 30 1995 services andtheeducationhealth while theprofessionalandbusiness by about400jobs,or2.6percent, leisure and hospitality sector increased lation. In2008,employmentinthe to thedemandsofanexpandingpopu- continue togrowaswellinresponse Many oftheservice-providingsectors recorded ayearearlier(seeTable3). cent, compared with employment levels increased by about 500 jobs, or 5.3 per- the transportationandutilitiessector
1996 40
1997 50 Resident Employment 1998
1999 60
2000 70
2001
2002 80
2003 Unemployment Rate 90 the next3years.TheGermanfirm sector isexpectedtoincreaseduring Employment inthemanufacturing employment bysectorintheHMA. or 1.9percent.Figure3showscurrent declined byatotalofabout600jobs, the wholesaleandretailtradesectors During thepastyear,employmentin a tollonsomesectors,however. each. Theslowingeconomyistaking 200 jobs,anincreaseof0.9percent services sectorsbothaddedabout
2004 Total NonfarmEmployment
2005 Service Providing Goods Producing Education &HealthServices Professional &BusinessServices Financial Activities Transportation &Utilities Wholesale &RetailTrade Manufacturing Government Other Services Leisure &Hospitality Natural Resources, Mining, Information & Construction 2006
2007
2008 10.0 0.0 2.0 4.0 6.0 8.0
Unemployment Rate M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 4 Economic Conditions Continued Table 3.12-MonthAverage EmploymentintheMobileHMA,bySector Navy andplanstoincreaseitslocal generation combatshipsfortheU.S. USA iscurrentlydevelopingnext- next 3years.AreashipbuilderAustal add asmany2,500jobsduringthe Force. Thisfacilityisexpectedto refueling aircraftfortheU.S.Air plant inthecityofMobiletobuild announced plansfora$600million Northrop-Grumman Corporationhas 2,700 workersbeginningin2010. of Mobilethatwillemployabout steel productionfacilitynearthecity building a$4.2billionadvanced ThyssenKrupp AGiscurrently Source: U.S.BureauofLaborStatistics Numbers maynotaddtototalsbecauseofrounding. Notes: Basedon12-monthaveragesthroughDecember2007and2008. Total NonfarmEmployment Service Providing Goods Producing Manufacturing Natural Resources, Mining,&Construction Government Other Services Leisure &Hospitality Education &HealthServices Professional &BusinessServices Financial Activities Information Transportation &Utilities Wholesale &RetailTrade Source: U.S.Bureau ofLabor Statistics Note: Basedon12-month averages through December 2008. Figure 3. 12.7% Health Services Education & 8.6% Hospitality Leisure & 5.0% Other Services 12.6% Business Services Professional &
HMA, bySector Current EmploymentintheMobile Government 15.0% Government 1.3 percent,ayear. to increasebyabout2,500jobs,or employment intheHMAisexpected during thenext3years,nonfarm is expectedtoaccelerate.Overall, service-providing sectors,jobgrowth with continuedexpansioninthe manufacturing activitystartingand ning in2010,however,withnew for thenext12to18months.Begin growth isexpectedtoremainweak Due tothecurrentrecession,job the next2years. workforce byabout1,000jobsover 12 Months December 183,300 152,100 5.1% Financial Activities Ending 16,200 15,100 31,300 27,900 15,500 23,300 23,000 31,800 2007 9,200 9,400 2,400 9,500 & Construction8.5% Natural Resources, Mining, 12 Months December 184,600 152,600 Information 1.4% Ending 16,400 15,700 32,000 27,700 15,900 23,500 23,200 10,000 31,200 2008 5.4% Transportation &Utilities 9,200 9,500 2,500 Manufacturing 8.9% Trade 16.9% Wholesale &Retail Change Percent – 0.7 – 1.9 0.7 1.2 4.0 2.2 0.3 2.6 0.9 0.9 5.3 0.0 1.1 4.2 - M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 5 Population andHouseholds forecast—estimates byanalyst Sources: 1990and2000—1990Census2000Census;current Figure 6.NumberofHouseholdsbyTenureintheMobile Figure 5.PopulationandHouseholdGrowth intheMobile Figure 4. by analyst Sources: 1990and 2000—1990Censusand2000Census; current—estimates forecast—estimates byanalyst Sources: 1990and2000—1990Census2000Census;current
100,000 120,000 Average Annual Change
20,000 40,000 60,000 80,000 Average Annual Change – 1,500 – 1,000 1,000 1,500 2,000 2,500 3,000 – 500 1,000 1,500 2,000 2,500 500 500 0 0 0
HMA, 1990toCurrent Components ofPopulationChangeintheMobile HMA, 1990toForecast HMA, 1990toForecast 1990 to2000 1990 to2000 1990 Population Net NaturalChange of theout-migrationwasduetoweak year since2000(seeFigure4).Much has averagedabout1,150peoplea than 2,000ayear,netout-migration minus residentdeaths)averagedmore net naturalchange(residentbirths 0.2 percent, a year since 2000 Although average increaseofabout850,or be 407,400.Thisfigurerepresentsan T Renter 2000 toCurrent 2000 toCurrent 2000 Mobile HMAisestimatedto he currentpopulationofthe Owner Households Net Migration Current toForecast Current toForecast Current 1,400 ayear. is expectedtoincreasebymore than number ofhouseholdsinthe HMA more than2,300ayear,while the lation growthisexpectedtoaverage the 3-yearforecastperiod,totalpopu- expected toincreaseslightly.During tion, therateofnetnaturalchangeis of roughly250peopleayear.Inaddi positive netin-migrationtotheHMA job growthshouldresultincontinued of AlabamaandtheGulfCoast.This to be strong compared with other areas growth in the Mobile HMA is expected During thenext3years,employment from 1990tothecurrentdate. of householdsbytenureintheHMA ship rate.Figure6showsthenumber terms, helpedincreasethehomeowner- mortgage ratesandfavorablelending Economic conditions,suchaslow are owners, up from 69 percent in 2000. of the current households, or 70 percent, as of the current date. Roughly 109,100 year, toatotalof155,300households of householdsslowedtoabout600a to out-migration, growth in the number 2000 (seeFigure5).After2000,due during the1990s,reaching150,179by increased bymorethan1,300ayear The number of households in the HMA from 1990tothecurrentdate. and householdgrowthintheHMA contains informationonpopulation Table DP-1attheendofthisreport imately 200to300peopleayear. remains positive,averagingapprox- in-migration hasslowed,butitstill evacuees havelefttheareaandnet the past2years,manyhurricane because ofstrongerjobgrowth.In from HurricaneKatrinabutalso mostly duetoaninfluxofevacuees than 5,000peopleayearafter2005, the MobileHMAincreasedbymore from 2001 through 2004. Migration to economic conditionsthatprevailed - M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 6 Housing Market Trends Sales Market Figure 7. reduced production.Thenumberof ing, however,homebuildershave (see Figure7).Withhomesalesslow 2,300 newhomeswereauthorized peaked in2006,whenapproximately 2005. Single-familyconstruction averaged about1,750from2000to the number of building permits issued, in theMobileHMA,asmeasuredby The construction of single-family homes during 2007. average of66daysonthemarket of 86daystosellcomparedwithan homes onthemarkettookanaverage taking longertosell.During2008, of 19percent.Homesalsohavebeen with 2,700during2007,anincrease than 3,200during2008,compared homes forsaleaveragedslightlymore increased. Theinventoryofexisting of unsoldhomesonthemarkethas With the slowdown in sales, the supply year earlier,toapproximately$154,900. 3 percentfromthepricerecordeda in 2008 also declined, falling by nearly sold. The average price of a home sold during 2007,toabout4,000homes 20 percent compared with sales recorded home salesintheHMAweredown Center forRealEstate,during2008, standards. AccordingtotheAlabama job growth and tight mortgage lending HMA is currently soft, a result of slower The homesalesmarketintheMobile Source: U.S.Census Bureau,BuildingPermitsSurvey Notes: Includesonly single-familyunits.Includes datathroughDecember2008. 1,000 1,500 2,000 2,500 500 0
Single-Family BuildingPermitsIssuedintheMobileHMA, 1990 to2008 1990
1991
1992
1993
1994
1995
1996
1997 -
1998
1999 the next3years. rate saleshousingintheHMAduring demand by price range for new market- be absorbed.Table4showsestimated the currentexcesssupplyofhomesto period, beginningin2010,toallow during thesecondhalfofforecast of thenewunitsshouldbecompleted of thecurrentslowsalesmarket,most currently underconstruction.Because demand willbemetby250units for 4,100newsalesunits.Partofthat forecast period,demandisexpected household growthduringthe3-year Based onestimatedpopulationand cally startatabout$140,000. two-bath homesinsuchareastypi new single-family,three-bedroom/ services alreadyinplace.Pricesfor and theareashaveretailother other jobcentersiswelldeveloped, areas withdowntownMobileand traffic infrastructureconnectingthese Run, southwestofMobile.The munity ofSemmes,andLabrador northwest ofMobile,nearthecom new subdivisionsincludeWinchester, of thecityMobile.Some unincorporated MobileCounty,west in theHMAhasbeenconcentrated Much oftheresidentialconstruction a 29-percentdecline. about 1,825in2007to1,3002008, single-family permitsissuedfellfrom
2000
2001
2002
2003
2004
2005
2006
2007
2008 - - M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 7 Sources: 1990and2000—1990 Censusand 2000Census;current—estimates byanalyst Figure 8. Sales MarketContinued Housing Market Trends 10.0 11.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
Rental Vacancy RatesintheMobileHMA,1990toCurrent 1990 10.1 Source: Estimatesbyanalyst Rental Market the weak economy. Intheaftermath market intheHMAwas softdueto As recently as 2004, the rental housing available forrent. their homes, moreunitsarebecoming owners encounterdifficultyselling sales marketisalsoafactor. As slowing Thesofthome in-migration. along withweaker jobgrowth and 600 new rentalunitsin the pastyear, roughly mainly totheadditionof (see Figure 8). The increase is attributed compared with7percentayear ago HMA isestimatedtobe8percent, rentalvacancyThe current rateinthe year, but it remains relatively balanced. market hassoftenedabitinthepast The MobileHMArentalhousing Table 4. 2000 10.2 1,000,000
Estimated DemandforNewMarket-RateSalesHousinginthe Mobile HMA,January1,2009to2012 750,000 500,000 400,000 350,000 300,000 250,000 200,000 160,000 130,000 100,000 From Price Range($) Current 8.0 and higher 999,999 749,999 499,999 399,999 349,999 299,999 249,999 199,999 159,999 129,999 To apartments neartheUSAcampus.apartments projects includenearly 400 student were (seeFigure9).Recent permitted more than700new multifamily units activity remainsstrong. During2008, during 2001to2005.Construction compared withabout300unitsayear year were authorizedbypermits, more than550multifamily unitsa During2006and2007, permitted. multifamily units by thenumber of production,as measured apartment rental marketafter2005byincreasing Builders respondedtothetighter bedroom unit. two-bedroom and$950forathree- a one-bedroomunitto$750for the HMArange fromabout $600for Currently, average monthly rentsin thetightmarket. a year becauseof HMA increasedbynearly 7percent to 2007, average apartment rents in the from 8.1percentin2004.From 2005 to approximately 1percent,down vacancy rateintheHMAhadfallen INC., by2006,theaverage apartment ricane. According to AXIOMETRICS evacuated totheHMAafterhur It is estimated that nearly 10,000 people rental conditions tightened significantly. Hurricaneof Katrina in 2005, however, Demand Units of 120 160 285 385 520 625 675 595 390 280 65 Percent of Total 12.7 15.2 16.5 14.5 1.6 2.9 3.9 7.0 9.4 9.5 6.8 - M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 8 Rental Market Housing Market Trends Continued Source: Estimates byanalyst and higher. Notes: Distribution aboveisnoncumulative.Demand shownatanyrentrepresents demandatthatlevel Table 5. Monthly Gross and higher Rent ($) 1,050 1,150 1,250 1,350 850 800 750 700 900 650 950 One Bedroom
Estimated DemandforNewMarket-RateRentalHousing intheMobileHMA, January 1,2009to2012 $1,150 forathree-bedroomunit. unit to$950foratwo-bedroom and from about$850foraone-bedroom for theproposeddevelopments range demand. Theaverage monthly rents opment pipeline will meet the forecast and the900unitscurrently inthedevel- 300 units currently under construction in theHMA.Theapproximately expected for1,200new rentalunits During thenext 3years, demandis housing. with theirfamiliesorinlocalrental the remaining11,000studentslive fewer than3,000studentsoncampus; The university canaccommodate Figure 9. Source: U.S.CensusBureau,BuildingPermitsSurvey through December2008. Notes: Includesallmultifamilyunitsinstructureswithtwoormoreunits.data Demand Units of 100 200 300 400 500 600 700 800 270 310 340 370 230 420 190 150 120 100 0 80
1990 1990 to2008 Multifamily BuildingPermitsIssuedintheMobileHMA,
1991
Monthly Gross 1992 and higher Rent ($) 1,000 1,050 1,100 1,200 1,300 1,500 1,400 1993 950 900 850 800
Two Bedrooms 1994
1995
1996
1997 Demand Units of 1998 370 410 450 320 540 270 230 180 120 50 80 1999 the HMAduringforecastperiod. for new market-raterentalhousingin bedrooms rent level andnumber of Table 5shows estimateddemandby year 4,following theforecastperiod. demandin period inanticipationof the forecast gin untilthethirdyear of additional rentalunitsshouldnotbe market conditions, theproductionof To maintainbalancedrentalhousing theforecastperiod. third years of completed duringthesecondand development pipelinewilllikely be during 2009,whilethoseinthe shouldbecompleted construction theunitscurrently under Most of 2000
2001 Monthly Gross
and higher 2002 Three orMore Bedrooms Rent ($) 1,100 1,050 1,000 1,150 1,200 1,250 1,350 1,450 1,650 1,550 2003 950
2004
2005
2006
2007 Demand Units of 170 190 220 240 140 120 110 2008 80 60 30 40 - M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 9 Data Profile Sources: Estimatesbyanalyst;U.S.CensusBureau;DepartmentofHousingandUrbanDevelopment 2000, andthe12monthsthroughDecember2008. Notes: Medianfamilyincomedataarefor1989,1999,and2007.Employmentrepresentannualaverages1990, Table DP-1.MobileHMADataProfile,1990toCurrent Total ResidentEmployment Nonfarm Employment Unemployment Rate(%) Total Population Total Households Owner Households Renter Households Percent Owner(%) Percent Renter(%) Total HousingUnits Owner Vacancy Rate(%) Median FamilyIncome Rental Vacancy Rate(%)
137,300 159,601 378,643 136,899 151,220 $30,200 91,513 45,386 1990 66.8 33.2 10.1 6.5 2.3 179,700 178,573 399,843 150,179 103,391 165,101 $43,300 46,788 2000 68.8 31.2 10.2 4.4 1.6 Current 184,600 176,800 407,400 155,300 109,100 172,050 $46,100 46,200 70.3 29.7 5.0 2.8 8.0
1990 to2000 Average AnnualChange(%) 2.7 1.1 0.5 0.9 1.2 0.3 0.9 3.7 2000 toCurrent – 0.1 – 0.1 0.3 0.2 0.4 0.6 0.5 0.8 M o b i l e , A L • COMPREHENSIVE HOUSING MARKET ANALYSIS 10 pdf publications/pdf/CMARtables_MobileAL_09. market forthisHMA,goto For tothehousing additionaldatapertaining the development pipeline. orunitsin for unitscurrently underconstruction excess vacancies. Theestimatesdonotaccount theanalysis, growth, losses, and dateof the as-of the3-year forecastperiodgiven conditionson of needed toachieve abalancedmarketattheend thetotalhousing production the estimatesof buildingactivity.are notaforecastof Theyare Demand: Thedemandestimatesintheanalysis estimates Forecast period:1/1/2009–1/1/2012—Analyst’s date:1/1/2009—Analyst’sCurrent estimates 2000: 4/1/2000—U.S. DecennialCensus 1990: 4/1/1990—U.S. DecennialCensus Data DefinitionsandSources . www.huduser.org/publications/econdev/mkt_analysis.html For on othermarketareas, additionalreports pleasego to www.huduser.org/ conditions. onlocaleconomicandhousing market and information state andlocalgovernment officials whoprovided data sources and expresses itsappreciation tothoseindustry may bemodifiedbysubsequentdevelopments. HUD national sources. Assuch,findingsorconclusions datefromlocaland availableinformation ontheas-of aspossiblebased on are asthoroughandcurrent and MarketAnalysis Division. Theanalysis andfindings guidelines andmethodsdeveloped byHUD’s Economic The factualframework forthisanalysis follows the may beunderconsiderationbytheDepartment. insuranceproposalsthat anymortgage of acceptability regardingthe tomakedeterminations does notpurport local housingmarketconditionsandtrends. Theanalysis ful tobuilders, mortgagees, with andothers concerned findings,information, andconclusionsmay alsobeuse Development (HUD)initsoperations. Thefactual theU.S. HousingandUrban guidance of of Department This analysis fortheassistanceand hasbeenprepared [email protected] 303–672–5005 Denver HUDRegional Office James Conner, Economist Contact Information . -