Shoals bucking the trend

Wrapping up third-quarter figures and heading into the last quarter of the year, housing and revenue numbers for the Shoals indicate that the economic woes being experienced elsewhere in the country have yet to take as strong a hold locally.

Kerry Gatlin, dean of the College of Business at the University of North Alabama, said the area is always slow to adapt to new trends, whether positive or negative.

"We're usually behind national trends like that, and sometimes things here are as bad as they are elsewhere, and sometimes it's not as severe," he said.

In September, 127 homes were sold in Colbert and Lauderdale counties, which is down from August's figure of 143. It's not, however, the lowest figure in 12 months. In January, which is typically a slow month for home sales, only 88 properties were sold.

"There is frequently a slowdown in real estate as we approach the holiday season," Gatlin said. "However, I suspect the slowdown is steeper this year due to the slowing economy, particularly in housing."

In addition to fewer homes changing hands, the price of the homes bought in September was down. In August, the average selling price was $130,800, while in September that amount fell almost $9,000 to $121,778. Homes spent an average of 71 days on the market, down from 72 in August.

Nationally, Gatlin said housing prices are softening and significantly so in some of the more inflated markets.

"The Shoals never really experienced the inflated 'housing bubble,' so it's unlikely that we will see a significant decline in housing prices here," he said. "We'll likely see some softening, but not to the degree seen in other markets. In our area, most softening will likely be at the higher end of the market in housing that is over the $250,000 to $300,000 range."

Although some individuals have found financing difficult in the post-subprime fallout, Gatlin said banks will continue to lend money but be more prudent in their practices.

September also posted a slight dip in lodging tax collections. In August, $85,691 was collected; this month, $85,514 was collected from local hotels and motels.

Gatlin said this figure is better than he might have expected "given the slowing economy and the spike in gasoline prices a few weeks ago."

The Shoals is home to the annual Trail of Tears ride, which takes place in September and could be one reason lodging tax collections were relatively steady. Gatlin said he expects future revenues from hotels and motels to be cyclical, but, like other aspects of the local economy, he said this will also be affected by the national slowdown.

Tax collections support local bottom lines, often serving as the sole support for citywide programs such as garbage and leaf collections, as well as road paving.

For September, tax collections in the two-county area were $158 million, which was down from August's $173.6 million. The figure is up from September 2007, however, when $151.8 million was collected in Colbert and Lauderdale.

"I keep thinking the slowing economy will begin to impact sales tax collection," Gatlin said. "Certainly, this is to be expected, and I think it will occur. I was at a mall in Birmingham last weekend, however, and it was packed. I'm not sure if most folks were looking or buying. Maybe consumers haven't gotten the message about the severe economic recession yet."

Unemployment figures for the state for October were 5.6 percent, but Tom Surtees, director of the Alabama Department of Industrial Relations, said that for September, the 5.3 percent unemployment rate was below that of the rest of the nation, which was at 6.1 percent.

Both he and Gatlin agree that the figure will probably rise statewide and in the Shoals in the coming months.

"Our economy typically lags the national economy - slower to heat up and slower to cool down," Gatlin said. "But we do track the national economy. The Alabama National railcar plant in Barton will help soften our employment numbers, as will several other solidly performing facilities. Still, I expect we'll see a modest increase in unemployment, especially after the first of the year."

What remains unknown, he said, is what, if any, economic stimulus plan will be passed by Congress and how that could help serve as a steadying force in unsteady times.

Michelle Rupe Eubanks can be reached at 740-5745 or michelle.eubanks@TimesDaily.com.