By Thomas Oliver
The Atlanta Journal-Constitution
Good economic news keeps trickling in.
We seem to have avoided the dreaded double-dip recession, though how quickly we’ll recover is still uncertain.
Jeffrey M. Humphreys, Terry College of Business professor at UGA, early on predicted the length and severity of the recession, as well as saying it would be a jobless recovery.
So, we should pay attention now that he's making speeches around the state about a recovery.
Despite persistent problems, such as tight credit and anemic job growth, Humphreys says Georgia’s recovery will be sustained. No fear of a double dip.
However, because our economy was so dependent on real estate – housing and commercial – Georgia’s recovery will be slower than the rest of the nation's.
Georgia will lag the national recovery because it had an “outsized construction industry, a huge supply bubble of residential and nonresidential properties, and a swollen pipeline of properties at various stages of development,” Humphreys says.
Plus, we had huge concentration of businesses closely related to real estate, such as building materials and supplies.
And, of course, we had banks underwriting all that.
“The financial crisis did much more damage to Georgia’s banks than to the nation’s financial sector,” Humphreys says.
We also lost more jobs on a percentage basis than the country did -- 8.3 percent vs. 6.1 percent.
Humphreys characterizes the employment situation as a lost decade for the state, because “at the dawn of the millennium, Georgia had 3.9 million jobs. A decade later we have 3.8 million jobs.”
The recovery in jobs will also be slow. Slower than the pace of those entering the workforce, so that the unemployment rate will rise to 11 percent in the next few months.
But our economy will catch up with the nation’s recovery sometime the middle of next year.
In the meantime, if you are looking for a job right now, Humphreys says check out temp agencies or jobs in healthcare, the defense industry or with the federal government.
Within a couple of months, there should be jobs opening in transportation, education, retail, and the hospitality industry. By late 2010, “the financial sector will be on the upswing.”
While consumer spending will take a while to recover, “business spending will increase sharply,” Humphreys says. Especially for transportation equipment, computers, software and communications equipment.
More good news:
“The recession has done nothing to reduce Georgia’s attractiveness as a cost effective place to do business…[and] Atlanta is the least costly, large U.S. metropolitan area in which to do business,” the professor notes.
And saving the best for last:
Our long housing nightmare has run its course.
“For the first time since 2005, the housing market will push Georgia’s economy forward rather than backward,” Humphreys predicts.
Prices have stabilized, if at a depressed levels, which Humphreys says could have two positive effects:
The low prices will entice buyers, now that they know the prices won’t go lower after they buy. And, "home price appreciation could be significant once the inventory of unsold homes normalizes.”
That’s what we’ve been waiting to hear for what seems like forever.
Editor’s note: This is Thomas Oliver's final column. As he closes a 33-year journalism career, Oliver plans to devote time to teaching his highly regarded writing class to businesses. And performing his country music songs in his new hometown of Tybee Island. 

SHORT SALE BUYERS 

RISMEDIA, February 19, 2010—(MCT)—Rachel Nacion-Ograyensek and her husband are getting nervous. The house that the two apartment dwellers want to buy—the one with the double oven, pool and tiled patio—may slip away from them. 

It’s on the market as a short sale, so the owner can’t act until the mortgage holder approves the discount price. But the Altamonte Springs, Fla. couple insists on buying their first home in time to take advantage of the federal government’s home buyer tax credit, which now expires April 30, 2010.
“The house is our dream house—it’s perfect for us,” Nacion-Ograyensek said. “We are trying to get in on the tax credit, but it’s done in April, and it’s already February. We’ve gotten to the point where we’re passively looking for other houses, but none are quite right.” 

Under pressure from the real estate industry, Congress extended and expanded the tax credit last fall. It was to have ended November 30, 2010 and benefit only buyers who had not purchased a home in the past three years. Like the original, the latest version is worth as much as $8,000, but it gives both first-time buyers and qualified existing homeowners until April 30 to secure a contract on a home, and until June 30 to close the deal. 

Though real estate agents and homebuilders hope the measure boosts sales, as the previous version was credited with doing, some fear that buyer’s intent on getting a short sale bargain will not make the new deadlines. 

In the Orlando area, 67% of Realtors’ existing-home sales in December 2009 were distressed sales—and about half of those were short sales, known for taking at least three months to complete. Even buyers who nail down a contract with the seller by the April 30 deadline can’t be sure the purchase will close within the required two months. “That’s where you get into that riverboat-gambling mentality,” said Jim Ruddy, the longtime real estate agent representing Nacion-Ograyensek and her husband. “Is it worth gambling that $8,000?” At this point in the tax credit countdown, buyers interested in purchasing a short sale must decide whether they are really committed to that property—enough that they would still want to purchase it if they miss the June 30 tax credit deadline, Ruddy said. 

Nacion-Ograyensek said she and her husband recently revisited the short sale house in Altamonte Springs and decided it was worth the gamble. The kitchen is ideal for cooking, and the backyard is large enough if they have children or adopt a dog. They have decided to stick with their plan; still, each day that passes makes them more anxious. 

In hopes of capturing tax credit-motivated buyers who aren’t focused on distressed properties, Florida’s real estate agents have scheduled an unprecedented statewide open house of properties listed for sale. The event, organized by the Florida Association of Realtors, is set for April 10-11—just two weeks before the tax credit deadline. 

Kathleen McIver-Gallagher, chairman of the Orlando Regional Realtor Association, said buyers intent on getting the tax credit should be concerned if they are trying to purchase a short sale through lenders known for slow responses to short sale offers. 

As the April tax credit deadline nears, buyers will probably become more interested in homes other than distressed sales, McIver-Gallagher said. “There are plenty of regular homes out there,” she added. 

Compounding the delays are new reporting rules that lenders must now follow. Nate Morris, vice president of Thomas Mortgage and Financial Services, said the new requirements involve good faith estimates and HUD closing documents. “It certainly could further complicate things,” said Morris, a board member of the Mortgage Bankers Association of Florida. “I don’t see this working out till the middle of the year. Everyone in the mortgage business talks about it on a daily basis.” 

(c) 2010, The Orlando Sentinel (Fla.).