While the state of Alabama has been slow to recover economically since the recession officially ended five years ago, recovery of the housing market in the state has struggled along with the rest of the nation so far this year, according to a special commentary on Alabama's economic outlook by the Wells Fargo Economics Group for September 2014.
In the commentary, Wells Fargo reported that Alabama's nonfarm payrolls at 4.7 percent below their pre-recession peak were the fourth worst of any state. Not only that, but Alabama's real GDP increased by only 0.8 percent in 2013 while the national real GDP grew at a rate of 1.8 percent for the same period. Poor performances in the public sector have been a major factor in Alabama's slow overall economic recovery, Wells Fargo reported.
Manufacturing of transportation such as automobiles, aircraft, ships, and boats, has been a strength in Alabama, as have the education and health services, the commentary reported. Slow population growth as well as employment growth in the state have resulted in low housing demand, however.
Home prices in Alabama are currently at 11.8 percent below their pre-recession peak, which is close to the national average, according to Wells Fargo. But after experiencing a surge in 2013, home sales fell off dramatically in Alabama in 2014. The percentage of home sales that are new homes remained low, indicating recent slow residential development. The number of foreclosures in Alabama has been relatively low considering the state's soft job market, while the state's number of homeowners delinquent on their loan by more than 90 days falls in line with the national average.
The coming years should see gains in the construction industry in Alabama, since several new industrial projects are pending, the report concluded.