MOBILE, Ala. — It’s not really a good time to be in real estate anywhere, but in spite of the current nationwide crisis involving foreclosures and a stagnant market, things could be worse in Baldwin and Mobile counties.

Nearly 400 professionals directly or indirectly involved in the buying, selling, leasing and developing of southwest Alabama properties convened Wednesday for the Gulf Coast Commercial Real Estate Summit II and Market Review. The all-day meeting, held at the Arthur R. Outlaw Mobile Convention Center, brought forth a mix of good and bad news.

Chuck Stefan, senior vice president of the Mitchell Co., said the current negative situation was caused primarily by lenders who enabled unqualified home buyers to obtain mortgages. Those who default on their loans are often falling back on the rental market, however, keeping many multifamily developments near capacity.

Although rental units seem to be doing relatively well, speculative homebuilding is on the downturn, and will likely remain so for the immediate future, according to Rance Reehl, owner of Coldwell Banker Reehl Properties in Fairhope.

Reehl said 2008 Baldwin County single-family subdivision activity was down 84 percent, compared to 2007 figures, with around 1,980 lots approved two years ago and only 307 approved last year. Of the county’s major municipalities (Daphne, Fairhope, Foley, Gulf Shores and Spanish Fort), Spanish Fort continues to be the fastest growing, with Daphne slowing to a snail’s pace and coming in last.

Statistics presented by Reehl indicate banks now hold titles on at least six failed subdivisions on the Eastern Shore alone, for a total of around 750 lots. He noted there is a 12-month new home inventory in the area, adding, “There are incredible opportunities for those who stick this out.”

Condominiums, particularly apartment conversions, are seeing some success in Mobile County. Here in Baldwin County, the number of available condo units is smaller, and few are actually on the market, said Mickie Russell, owner of Dauphin Realty. Looking at the 1,478 individual condos (excluding beach units) there are in Baldwin County, Russell said only 177 (12 percent) are listed right now. The bulk of all units are on the Eastern Shore, with 171 in Foley, 18 in Robertsdale, 16 in Loxley/Steelwood and four in Summerdale.

She pointed out a high percentage of condos on the Eastern Shore are owned by investors, a trend she believes carries in other parts of the county not surveyed. Russell added there would likely be a shortage of multifamily dwellings in both counties if not for investors willing to take up the slack.

Sheila Hodges, owner of Gulf Shores-based Meyer Real Estate, said tourists and snowbirds continue to make beach condominium units a good investment. She said the coast averages 4 to 5 million visitors a year, with 2007 showing a $2.3 billion economic impact and 42,000 supported jobs. Tourist and winter visitor spending accounted for $218 million (26 percent) of Alabama’s lodging tax collections.

Hodges said 1,718 waterfront condo units are for sale on the Gulf side of Pleasure Island, but only 5 percent directly face the Gulf.

Meanwhile across Mobile Bay, other prime waterfront property is seeing a lot of activity, and more is needed. Judith Adams, manager of media relations and economic development for the Alabama State Port Authority said the docks are chugging along, even as the economy continues to sour. She said port officials are “cautiously optimistic” that President Obama’s economic stimulus package will help fund needed dock expansion projects, and that suitable properties will be found for both private and public interests.

“We’re going at such an astronomical pace, we can’t keep up,” Adams said, adding only half of the cargo moving through Mobile makes its way through the state facilities.

She noted various companies have an opportunity to get involved, saying, “If you can move goods, services and people cheaply and effectively, you’re going to be successful.”

Adams said Alabama Port Authority activities are responsible for 66,617 direct and indirect jobs on the Gulf Coast. Port operations also have an annual $263 million direct and indirect tax impact in the area, as well as a total economic impact of $7.9 billion.

Because Baldwin County is no longer part of the Mobile Metropolitan Statistical Area, but is instead classified as the Daphne-Fairhope-Foley Micropolitan Statistical Area, real estate and economic data is not as extensive and readily available as it is for our neighbors to the west, according to Dr. Donald Epley, director of the University of South Alabama Center for Real Estate Studies, a department of the USA Mitchell College of Business. But, enough is known for him to say, “Mobile and Baldwin both took a tick down (economically) in the last quarter.”

According to Epley, the Baldwin production output (measured like the U.S. Gross National Product) was down nearly 2 percent in comparison to the third quarter of 2008. It was down 1.10 percent over the previous three quarters.

“We have to get the banks lending again,” Epley said. “We need to get over the confidence crisis.” Edgy investors and a reduction in lending have sent the economy into a tailspin, and Epley said a reversal is what’s needed to stem the tide of red ink pull the economy out of the ditch.

Epley cautioned there is a possible downside to a speedy recovery. He said some retailers are now keeping their inventories low, and have reduced their staff. Because of that, spending power in better economic times goes down, inflation can result and the overall standard of living would decline.

He said the local economy could grow 11 percent over the next quarter, about half of previous projections. Epley added, “We’re guardedly optimistic about the future.”

The forum was presented by the University of South Alabama Mitchell College of Business Center for Real Estate Studies, the University of South Alabama Center for Continuing Education and Conference Services, the Gulf Coast Multiple Listing Service and the Mobile Area Association of Realtors, with the help of numerous sponsors.