We are living in a tough economic time - fuel costs, real estate, and the spending trends across the country are not favorable to the future welfare of our economy. Real estate, in particular, brings a significant and immediate challenge that faces our economy. The subprime mortgage rate crisis, along with a borderline recession, make real estate a tough sell in the current market.



In Alabama, real estate is suffering just as it across the nation. The subprime mortgage crisis is making it very difficult for many people borrow money to purchase new homes. In short, the subprime mortgage crisis effects people who don't qualify market interest rates due to low-level income, down payment size, and poor credit history. These people make up a significant portion of new home owners and therefore create a huge impact on the market.

Alabama ranks 47th in average household income as well as ranking among the bottom ten nationwide in credit rating. These factors add up to mean that the Alabama real estate outlook is very grim. Until something happens to heal the economy in Alabama, and nationwide, the subprime mortgage crisis will continue to get the best of Alabama, as well as the country as a whole.

Things are not all "doom and gloom" for the Alabama real estate market, however. Huntsville a metropolitan area in northern Alabama has seen very good real estate numbers over the past year. Homes in Huntsville are generally more affordable than comparable markets in the state, such as Mobile, where home prices are $20,000 more on average. Keeping home prices down, however, is not the solution to solving the credit crunch, but at this point, thriving home sales by any means are a good sign.

In attempting to heal the recession, and the subprime mortgage crisis, it is important that we as a nation look to states like Alabama - that are on the lower end of the economic spectrum - in order to measure the effectiveness of proposed solutions. If we can heal the problems that face Alabama, then we should be able to find solutions for California, New York, and Florida - who find themselves much more malleable and capable of overcoming difficult economic times, including recessions and mortgage crises.

In short, the nation is heading for a recession, and the subprime mortgage crisis is showing no sign of relenting. But with any luck, real estate in Alabama and elsewhere will improve steadily and we will be able to find a way out of the toughest economy we've seen in 15 years.