Issue link: http://savannah.uberflip.com/i/1514376
17 5 The fiscal situation facing most local governments is better than the one facing state government. In most jurisdictions, local government will boost hiring faster because they depend more heavily on property taxes and fees for services and less so on sales and income taxes. Revenues generated by property taxes and fees typically are far less cyclical than revenues generated by sales and income taxes. Due to the post pandemic- recession housing boom, most local governments will generate enough revenue to sustain and expand programs. While we do not expect residential real estate prices to increase in 2024, it is highly likely that assessed residential property values will rise because assessed values lag market prices by a year or more. In 2020-23, there was heavy spending for major home improvement projects (e.g., swimming pools) that will add to residential property tax digests. In addition, new single-family home construction will be on the upswing, which will lead to the expansion of property tax bases. Economic Development Economic development prowess will be a powerful driver of economic growth in 2024. Georgia's economic developers broke records for the third-straight year and landed 426 projects in fiscal year 2023 compared to 358 projects the year before. International investment was especially strong. Georgia ranks seventh among the states in total foreign direct investment project dollars, putting Georgia behind only Florida in the Southeast. This aptitude reflects many factors that make Georgia a great place in which to do business. The state is viewed as a place where there is a good working relationship between state and local governments and other major players. Government is responsive to the needs of businesses, ranking very high in terms of its regulatory environment and speed of permitting. Atlanta's deep and broad pool of skilled and unskilled labor attracts businesses and the state's Quick Start program is well-known for its customized workforce development efforts. Because it often takes many years to complete the typical economic development project, many projects announced over the last several years will provide a substantial push to Georgia's economic growth in 2024. These include Qcells' two new solar module manufacturing facilities in northwest Georgia; life sciences manufacturer Meissner's new facility in Athens; and building manufacturer ADMARES' first U.S. plant in Waycross. Housing Market Housing is one of the most interest-sensitive sectors of Georgia's economy. Shortly after the Federal Reserve pivoted from easy money to tight money, mortgage rates doubled and ended the post-pandemic housing boom. The ensuing sharp runup in home prices played a role, too, and people suffered a temporary loss of faith in the economic situation. In 2024, sales of new and existing homes and permits to build new homes will increase but permits to build new apartments will decrease. The downturn in multi-unit construction reflects more difficulty in obtaining financing as well as recent high deliveries of newly opened properties that raised vacancy rates and softened rents. Meanwhile, investors will be less active in Georgia's housing markets. Home prices will hold steady, which is surprising, but prices historically are typically very sticky to the downside. Indeed, the lack of homes for sale should prevent home prices from declining despite moderate overvaluation. Of course, the outlook for homebuilders, home sales, and home prices could be much darker should the economic slowdown morph into a mild recession.