According to Dr. Don Epley, director of the center for real estate and economic development (CRES) at the University of South Alabama in Mobile, AL, business and real estate activity along the Alabama Gulf Coast should outpace that of the U.S. average. While speaking at the recent seminar, Epley cited reports from the Federal Reserve bank in Philadelphia which studies economic indicators for the region including parts of South Alabama including: Gulf Shores, Orange Beach, Spanish Fort, Daphne, Fairhope and Mobile, AL. According to these reports, Epley and others believe Alabama will grow at a rate of 4.6 percent placing them in the top 5 U.S. states in terms of growth. By contrast, the U.S. economy as a whole is expected to grow at a rate between 2 and 2.5 percent.
Mobile, AL is playing a large role in these expectations due to the opening of Airbus. Epley also explained expectations of growth for 2014 are just under 3 percent. "Typically there is a 3 month lag between business activity and real estate sales" Epley said and offered a projection that the residential real estate sector should experience an increase of 35 sales per month on average in the area. He pointed to a study conducted by the National Association of Realtors stating that an average of 1 in every 4 workers that move to the area for a job will purchase a new home in the area.
"I think that as the economy continues to improve locally and nationally, residential sales in the Mobile area will continue to increase between now and the Fall of 2014" Epley says. Because increased residential real estate sales are an indicator of growth in the commercial real estate market, this will cause systemic growth in the overall economy of the Southern portions of South Alabama. "If people are spending money on residential property, they will turn around and, after some lag time, start buying services from commercial providers"," Epley said.
Moving forward, Epley discussed the calculation of current economic factors which help to explain the readiness and willingness of consumers to purchase real estate. "We look at what drives the economy where jobs are created," he explained "We examine whether our workforce has the skills needed for the jobs being created, because that's what will drive the economy in the future." Additionally, Epley added that CRES tracks the level of employment in 10 categories, then compares that to how much people are paid.
When you multiply this together, you find out how much expendable income families have to purchase groceries, cars, real estate and luxury items. "That's what drives capitalism" Epley explained "It's what we're all about, two thirds of our gross national product in the U.S. is consumption".
FUTURE EVENTS ALONG THE GULF COAST:
The planned construction of a new bridge over Mobile Bay is currently outweighing every other business endeavor along the Gulf Coast....even Airbus, Epley said. He said the bridge is expected to generate approximately 1 billion in economic activity.
Second to that is the megasite in Bay Minette expected to employ hundreds of workers once filled with employees. When you factor in the expected impact of Airbus, the current impact from foreign-based businesses (4.6 billion) and increased activity at the Port of Mobile, it's easy to see why South Alabama is among the leaders in expected growth across the entire country moving forward over the next 1 - 2 years.
EDITOR'S NOTE: All of these things stand to be beneficial to our area and the beaches of Gulf Shores, Orange Beach and Perdido Key, FL also stand to greatly benefit from this growth. The residential areas along the Eastern Shore including: Daphne, Fairhope and Spanish Fort shall also be of great importance in terms of the expansion and growth of our coastal area.