Airbus on approach to Mobile as market improves on Eastern Shore

True story: Upon hearing that Airbus would be constructing an aircraft assembly plant at Mobile’s Brookley Aeroplex, a condo owner on the Eastern Shore instructed his Realtor to raise the price of his property. The Realtor did as instructed and was promptly rewarded with a showing.

Such was the psychological effect of the news that the European Aeronautic Defence and Space Co. (EADS) subsidiary would construct a $600 million plant, employing 3,000 workers in its construction phase beginning in 2013. Once built, the plant is expected to employ 1,000, with the first aircraft to be completed in 2016 and full production of 40-50 commercial planes annually expected in 2018.

For the local economy, there isn’t one negative to be found in the Airbus announcement other than we’re going to need a bigger tunnel on I-10, or better yet, a bridge. But the effects on this economy and housing market will be more like a rising tide than a tsunami.

Remember when ThyssenKrupp Steel USA constructed its plant in the Calvert, Ala. community? The construction workers came in with their fifth-wheels and set up temporary camps all over north Mobile County. They spent money, but they didn’t buy houses. One thousand Airbus workers with their families will not descend on south Alabama in a day, cash in hand and ready to buy a house. They will transfer in, find a rental, leave trailing spouses to sell their existing homes. It will be a process.

Undoubtedly, the psychological effect is already at work locally and will help the local housing market, which is already showing strong signs of stability. In fact, builders of new homes may have the most to gain.

So has the condo owner sold his unit yet? No.

Home sales for the first half of 2012 showed that the market continues to stabilize in Spanish Fort, Daphne and Fairhope.

•   The number of sales rose 16% in the first half of 2012, compared with year-to-date (YTD) in 2011. In the first half, 662 homes sold vs. 532 this time last year.
• The average sales price fell 1.25% from $223,274 in the first half of 2011 to $220,449 in the first half of this year.Yet the median sales price increased 1.5% in that same period, from $181,588 to $184,400.
• $137 million in property changed hands in the first half of this year, compared to $118 million in the first half of 2011.
• Inventory remains steady at around 820 homes for sale on the Eastern Shore. And the list-to-sale percentage has leveled out at close to 96.5%. In a typical market here, sellers could expect to slice about 3% off their list price in order to sell. So that list-to-sale percentage is closing in on the stable side.
• 19% of all sales were new construction.
• 27% of all sales were foreclosures or short sales; yet, less than of 1% of homes currently listed are distressed properties.

On to the 2^nd quarter stats:

Fairhope: 153 homes sold, up from 122 sales this time last year. Average price was $254,568, down from $263,264 in the 2^nd quarter of 2011. Sellers took almost 5% off the list price to sell and the average days on market stretched to 230 days, up from 209 days this time last year.

Daphne: 169 homes sold, up from 117 sales this time last year. Average price was $180,902, down from $183,765 in the 2^nd quarter last year. Sellers took 2.7% off their price in order to sell. Days on market improved from 164 days in the 2^nd quarter of 2011 to 149 days.

Spanish Fort: 63 homes sold, up from the 47 sales in the first half of 2011. Average price was $242,493, down from $252,923 in the 2^nd quarter of 2011. Sellers settled for 3.5% less than list price and days on market declined from 183 days in 2011 to 178 days.