The Chief Economist for the National Association of REALTORS gave an exclusive forecast for the economic outlook. The select few who were able to attend the presentation were offered great advice and knowledge for our area.
To begin with, many people are moving into Georgia, especially from the North, because property taxes are lower in our State. These individuals no longer want to pay the extraordinary tax amounts in states such as Connecticut, New York, and Florida.
In the year 2019, there were 30 billion dollars in home sales. Mortgage rates are lower now and the possibility of a recession has completely disappeared from the forecast. Lawrence Yun declared that the economy itself is looking good for the rest of 2020.
However, there is still an inventory shortage in the United States. Where inventory shortages were normally a coastal phenomenon, this is no longer the case – many inland states are experiencing it as well. So, why is this happening? Lawrence Yun looked further into the numbers to find the answers.
Dr. Yun started off with showing a graph of the GDP. The GDP is considered the bottom line in economics. Each year, the United States has been advancing, yet the year 2019 was not up to par in the growth. Nevertheless, consumer confidence is still rising, and is at at the same levels as it was in the year 2000.
Business and corporation profits are also rising, and are at an all-time high after taxes. Conversely, their investments are low due to fears of a trade war with China, Canada and Mexico. Canada and China have lately made agreements with the United States, and consumer confidence is returning into the economy.
Housing is steadily recovering overall. There was a slight dip in housing sales in 2018 due to mortgage rates going into 5%. Once the mortgage rates receded back into 4%, the market is responding with growth. The number of sales is not breaking records because people do not think it is a fantastic time to buy. One theory is that buyers are exhausted from competing for starter homes, and have become frustrated. There is a correlating demand for starter homes and a decreasing demand for higher-end, luxury homes. The prices for the higher-end homes are declining because of this correlation.
Not surprisingly, there is an increased amount of buyer showings for almost every state in the United States. For Georgia, the job growth is 28% compared to 16% nation-wide. The Atlanta job market is outpacing the national average adding optimism to the Atlanta market. Individuals in Georgia average just under $1,000 per week in earnings.
Dr. Lawrence Yun recommends alleviating the 5 to 6 million unit housing shortage by building more starter homes. Furthermore, a capital gains tax break for the investors who bough and are holding starter homes would help coax them into selling to invidivuals.
Overall, there should be 3% GDP growth per year if no trade war starts. There should also be an increased number of home sales and the prices for homes should continue to rise.