According to the most recent census surveys, Alabama has the following population and housing statistics.
The number of housing units is 2,014,536. Of these houses, the home ownership rate is 73.5% which is significantly higher than the national average of 66.2%. The per capita income in Alabama is $18,189 which is lower than the national average of $21,587. This is to be expected, as Alabama is not one of the countries major economic hubs, like New York or California. However, buying a house in Alabama is a reasonable option for many people, as the median value of owner occupied housing units is $85,100 which is almost $35,000 dollars less than the national average of $119,600. Families are doing well in Alabama, despite the median household income being $34,135 as compared to the national average median income of $41,994.
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The economic realities of the housing market in Alabama are somewhat complicated.
Recent commentaries on the housing industry in Alabama suggest that construction in Alabama will continue to expand through the next year due to a backlog in residential building projects, however labor costs could increase as skilled workers become harder to find and higher interest rates possibly reduce the building of new homes.
This prediction comes from Ken Simonson. Ken is the chief economist for the Associated General Contractors of America, who addressed the Alabama chapter of the group on Wednesday.
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Talking to a group of contractors fighting against skyrocketing materials costs, Simonson predicted that the Federal Reserve would increase interest rates again.
In the past few years, Alabama’s construction employment numbers have been running stronger than the national average, which indicates a solid construction industry. Employment in construction went up by 4.8 percent in Alabama from March 2005 to March 2006, outperforming the national average of 3.7 percent.
As the construction industry cools, Simonson predicts employment growth will also slow. The Alabama housing market is safe, and won’t collapse as the national housing market tails off against higher interest rates.
During the boom in housing that occurred in the previous years, Alabama’s market appreciated slower than the national market and the Montgomery market appreciated even slower, which creates downside risk protection.
The numbers from commercial bank National City Corp., suggest that Montgomery’s housing market is as much as 13.5 percent undervalued. This is good news for Alabama, as some markets on the East and West coasts are more than 70 percent overvalued.
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