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Wednesday, April 10, 2002 Builders hear housing info Area builders heard encouraging news at the Home Builders Association of Midwest Georgia1s recent meeting, when SunTrust Bank's Curtis Smith brought the group's annual economic update and housing forecast. Smith is first vice president of SunTrust Bank Atlanta, and his presentation came at the association1s February meeting, held at the Wyndham Peachtree Conference Center in Peachtree City. Smith began by saying that he is "truly encouraged by the way our country has responded to the tragedy in September," adding that he is "thankful for the strength of the country." Turning to the subject of the national economy, he said that the U.S. economy had a recession, but it now appears that it is probably over. "It was probably the shortest recession we1ve every had. It was a business depression, but it didn1t extend to consumers," he pointed out. "What happened was enough to cause a recession, but not enough to cause a bad recession. Usually, the economy drives the stock market. For a couple of years, the market drove our economy." Atlanta, he noted, still has the same strengths that it1s had in the recent past, including a diverse economy, a growth rate well above most other areas, above average per capita income, and strong in-migration of people. Even though Atlanta lost 60,000 jobs, the local housing industry has remained strong, primarily due to consistently low mortgage interest rates, a strong affordable home market, and renters moving from apartments into starter homes. Smith said that nationally the last five years have been the best five years the building industry has ever experienced, and the industry is the strongest it's ever been. In the Atlanta area, the South Atlanta housing market is getting stronger with this area1s market share going up 10 percent in the past 10 years. The current ratio of housing starts is 70 percent for North Atlanta and 30 percent for the Metro South area, and Smith reported that over 52 percent of the homes built in the Metro South area are under $150,000 in price. Giving details about the Metro South area's current housing market, Smith had the following observations: Henry County - the Metro South area's largest housing market with 3,000 new homes a year being built there. It's a very competitive housing market, and most of the homes being constructed are under $200,000 in price. Clayton County - the area1s second largest housing market, and primarily a starter home market. Most new homes in the $120,000 to $150,000 range. Coweta County - supports housing prices across the board up to $300,000. Coweta is a healthy market with most of the development coming in Newnan and Senoia. Fayette County - housing market here decreasing, but price range compares to Cobb and North Fulton counties. There1s very little affordable product in Fayette, and probably too many homes over $360,000. South Fulton County - market is still small, but showing increase and will continue to grow. Currently, it is primarily a starter home market. Smith's 2002 metro Atlanta housing outlook included predictions that building permits would remain flat at around 41,000; Metro South would increase its market share with South Fulton being responsible for much of the increasing lot supply; the affordable townhouse market would continue to grow; large builders (over 50 homes a year) would gain market share; metrowide lot supply would be tighter; and the prime rate would rise to around 6.25 percent and mortgage rates would range from 6.75 to 7.75 percent.
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