I have two Alvarez instruments, a classical guitar and a banjo. They're okay, but if I was a serious banjo or classical player, I'd definitely trade up.   

My son-in-law has an Alvarez dreadnaught. It sucks.

I've played plenty of Alvarez instruments and have found them to be extremely variable. Some sound great, others are the pits. IMO, Alvarez and Washburn are much more inconsistent than Yamaha. You may have to play a bunch of 'em to find a good one.   

However, I do know some excellent musicians who have used Alvarez instruments. My friend Guthrie Trapp, guitarist for The Jerry Douglas Band, played an Alvarez as a teenager and it doesn't seem to have held him back. And Gove Scrivenor usually plays an Alvarez he's had for years. He says he bought it as a temporary replacement after someone stole his Martin, but liked it so much it became his main axe.