Economic Snapshot Overview by Dr. Reid Cummings - November 2019

Posted on November 26, 2019 by Dr. Reid Cummings
Dr. Reid Cummings

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Greetings, and welcome to the November 2019 Mobile Bay Economic Snapshot.

Airport Passenger Traffic

A little over a year ago, we first introduced our airport passenger traffic dashboard. The new downtown Mobile airport opened earlier this year in May. With five months of passenger traffic data now in hand, we wondered how the addition of Frontier Airlines, with new direct flights out of the Brookley complex to Chicago and Denver would figure into overall passenger traffic counts for Mobile’s airports. As shown on our new updated dashboard, it does seem the overall effect has been positive.

From May through September, the data show year-over-year air passenger increases at both the Pensacola and Mobile airports. The Mobile 4.8% increase from May 2018 to May 2019 was the smallest increase recorded during the period, but thereafter, Mobile passenger traffic continued to increase. June 2019 was 7.2% higher than June 2018; July 2019 was ahead by 24.9% over July 2018; August was up 16.2% versus the same period a year earlier; and September showed the largest year-over-year increase ending 33.8% higher than September 2018.

In contrast, Pensacola’s airport also saw passenger traffic increases during the same period, but except for May and June, the first two months of Frontier’s operation in Mobile, Pensacola’s year-over-year percentage increases were less than those experienced by Mobile’s airports. After increases of 14.6% and 11.5% in May and June 2019, respectively, increases for July, August, and September 2019 were sharply lower compared to Mobile’s airports during the same period. In total, from May through September 2019, Pensacola realized a 13.3% year-over-year increase in passenger traffic versus Mobile’s 16.6% increase.

Clearly in terms of total passenger traffic, Pensacola leads the way. Yet Mobile should be proud of its very positive showing with the addition of its newest airport in just a short time. One of the arguments for shifting commercial passenger service downtown is that doing so will offer a more convenient airport alternative to residents of Baldwin County, especially those living in the nearby Eastern Shore corridor. Given that passengers can now choose to fly with any of the big three airlines—American, Delta, and United—from either Mobile or Pensacola, it will be interesting to see how customer airport preferences and flying decisions might change should one or all carriers eventually elect to fly from Brookley.

Real Estate Market Activity

Two just released housing metrics suggest continued strength for both the new and existing home sales markets. The Standard and Poor’s Case-Shiller 20-City Existing Homes Sales Composite Index finished Q3-2019 at 217.135, an increase of 2.1% from the same period a year earlier. New home sales showed incredible strength, rising 31.6% to finish at a seasonally adjusted 733,000 units. This is the highest level since July 2007, the month that two Bear Stearns mortgage-backed securities hedge funds holding nearly $10 billion in assets failed, marking the beginning of the end for the housing boom, and the ultimate collapse of the housing market and ensuing financial crisis of 2008-2009.

Speaking of housing markets, next month we will introduce our newest real estate market activity dashboard. Our readers know that we report all real estate sales transactions that are recorded in the Mobile and Baldwin County Probate Court Records. These data include Realtor-brokered sales and all other transactions not handled by real estate professionals. Although our current real estate dashboards accurately reflect all market activity, they do not offer users the ability to discern the differences between Realtor and non-Realtor transactions. We are very excited to begin offering this contrast and invite you all to be on the lookout for our newest dashboard, made possible by data provided by the Gulf Coast Multiple Listing Service.

Until next time, from everyone at the Center, we wish you and yours all the best.

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