Savannah Chamber

24 9 because unless home prices are increasing, builders will hesitate to build new speculative homes because it may take them too long to sell the homes that they contemplate building. There some negatives. In 2021, fears of a double-dip recession and supply-side constraints will continue to limit housing sales. Supplies of new homes are still constrained by years of underbuilding, a shortage of lots, and a scarcity of construction workers. In addition, there is a scarcity of listings of existing homes, and it is especially acute for homes in the bottom value tier. As mortgage forbearance programs wind down, more distressed properties will come onto the market. The price of the average existing single-family home will rise by 3% in Georgia in 2021. That constitutes a substantial slowdown in home price appreciation. For example, the most recent year-over-year increase – between 2019 Q2 and 2020 Q2 – was 4.5 percent. As potential homebuyers see a record of continuing home price appreciation, more will opt to become homeowners. The increased preference for a single-family home rather than an apartment will reinforce that trend. In 2012, investors were the main force behind home sales. In 2013-20, people who buy homes to live in them joined investors to become a second major force powering home sales. Nonetheless, as home prices rise, home sales to investors have dropped. Sustaining the recovery of the homebuilding industry through 2021 means that trade-up buyers and first-time buyers must become more active. That up cycle has begun, and it will become more vigorous. There is tremendous potential for even more active housing markets because a huge number of young people are still living at home, or are doubled up with roommates rather than living in their own apartments or homes. Sustained economic recovery and low mortgage rates in combination with a strong preference for detached housing will cause some of that potential to be unleashed in 2021. Demographics Demographic forces are another factor behind Georgia's improving economic performance. Georgia's population will grow at a pace that exceeds the national average in 2021 – 0.8 percent for Georgia versus 0.5 percent for the US. Domestic net migration will be lower than in 2019, but higher than in 2020. It rose to 23,419 people in 2014, up from a net loss of 5,471 people in 2013. Domestic net migration rose to 33,086 in 2015, to 37,979 in 2016, to 40,388 in 2017, to 41,914 in 2018; and to 49,680 in 2019. Due to the pandemic, domestic net migration was probably below 30,000 in 2020, but we do not have the Census data to confirm that expectation. In 2021, net domestic migration should increase to at least 35,000. Georgia is a very attractive destination for mid-career movers. Georgia also does very well when it comes to attracting top-career movers and retirees. Georgia's higher rate of population growth traditionally is dependent on net international migration of about 25,000 people, but COVID-19 reduced that number in 2020 and almost certainly will do so again in 2021. Georgia's population growth should benefit from an increase in number of births. Population growth therefore will be a driver of Georgia's GDP in 2021 – stronger than in 2020, but weaker than in the years preceding the pandemic. Prospects for Selected MSAs Atlanta From peak-to-trough the Atlanta MSA lost 11.7 percent of its jobs to the COVID-19 recession, but recovered 47 percent of its losses in the initial three month rebound. The heaviest job losses were in the air transportation, leisure & hospitality, and transportation equipment manufacturing. Atlanta's recovery from the virus crisis will outpace nation's recovery and will essentially pace that of the state as a whole. Business development, an educated workforce, innovation, above-average population growth and strong housing markets underpin Atlanta's economic recovery from the COVID-19 recession. In 2021, the pace of job growth will be 1.7 percent which is almost double the 0.9 percent gain expected for the US. The area's economy and its economic growth are very diverse, which decreases the economic risk associated with living and doing business in Atlanta. The area's leading high wage industries include computer systems design, management of companies and enterprises, and offices of physicians. Leading mid-wage industries include general medical and surgical hospitals and building equipment contractors. The leading low-wage industries are restaurants, employment services companies, and grocery stores. The MSA's politics are very business friendly. Atlanta is a major business and professional services hub. Atlanta is a well-established transportation and logistics hub. Atlanta is an innovation hub. Atlanta is also an information hub. The early deployment of 5G – the next generation of cellular

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