Economist Informs Beacham & Company that Keys to Housing Recovery are Millennials, Home Building
Posted by Dac Carver — March 24, 2015
ATLANTA, GA — The Millennial generation, consisting of individuals born between 1982-2000, along with commercial lenders and home builders, hold the key to a complete recovery in the Atlanta housing market according to Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
Dhawan, who spoke to a company-wide meeting of Beacham & Company, REALTORS® today at the firm’s Buckhead offices, would not predict when these forces would come together to move the housing market closer to full recovery, but he offered a clue as to when Millennials – already recognized by the National Association of REALTORS® as the largest segment of eligible home buyers – might enter the housing market en mass.
“Millennials are timing the market, waiting for interest rates to rise,” Dhawan said. “Every time an economist says interest rates will rise, they don’t.” However, Dhawan predicted there is a better than 50 percent chance interest rates will rise by September of this year and will rise one percent in 2016 and again in 2017.
Dhawan also said commercial lenders and home builders are critical to the recovery. More than half of the multi-family residential projects announced for the housing darling of Millennials – Midtown – have not received financing and the projects that have are mostly apartments. He also lamented the still muted return of home building, noting that Atlanta housing permits are still just 15 percent of what they were in the mid-2000s. One of the challenges is that the small-to-medium sized single family home builders are “gone,” he said. “And (production) builders won’t build any more houses than they are already building.”
Rajeev Dhawan speaking at company-wide meeting of Beacham & Company, REALTORS®
Dhawan’s comments echoed those of another economist, Lawrence Yun of the National Association of REALTORS®, who called for loosening of credit standards for homebuilders in today’s issue of The Wall Street Journal. Yun told the Journal that, “exempting smaller lenders from new mortgage rules could help revive home building activity and boost the overall housing market.”
Due to Beacham & Company’s specialty in luxury real estate, Dhawan also addressed the current state of high-end home sales. He said the demand for properties priced between $500,000 and $1 million is much more tied to U.S. stocks than a decade ago. Further complicating matters, the factors influencing the stock market have shifted from domestic to international. For example, a series of events principally involving Russia, the European Union and China over the last year or more has made the U.S. stock market the darling of world capital, he said. The result has been a tripling in value of U.S. stocks from 2009 and more optimistic buyers of luxury real estate.
Dhawan, fresh off a presentation to the Federal Deposit Insurance Corporation in Washington, DC yesterday, said he feels good about Georgia’s economy because it is being lifted by strong consumer confidence, job growth in the catalyst sectors, and a construction boost from “mega” projects. He said potential trouble spots for the world’s economy are the banking sector in Europe and China’s inability to jump start its economy.
About Rajeev Dhawan
Rajeev Dhawan is director of the Economic Forecasting Center at the Robinson College of Business at Georgia State University. As director of one of the country’s premier forecasting centers, Dhawan develops forecasts for the U.S., Southeast regional, and local metro Atlanta economies. These forecasts are regularly published and presented to business executives and the media at the center’s popular, well-respected quarterly forecasting conferences.
Dhawan has received several awards for his forecasting accuracy, including most accurate GDP forecast by Bloomberg News in 2005. The Bank One Economic Outlook Center at Arizona State University in 2003 named him the most accurate forecaster for U.S. employment. He has also been listed among Georgia Trend magazine’s “100 Most Influential Georgians” for three consecutive years. Dhawan is known for his ability to articulate complex economic issues in terms that are extremely relevant to the business community. He is frequently called upon to brief the boards of private companies and regularly gives keynote speeches at various industry and trade group events.
A sought-after international speaker, he has presented at conferences in Argentina, Canada, the Dominican Republic, Germany, India, Japan, Netherland, Spain, Sweden and across the U.S. As a consultant, he has been commissioned to prepare economic impact reports, home price forecast models and provide public policy recommendations. Dhawan has served as an advisor to several local and state government agencies and numerous publicly held companies. These companies include Coca-Cola, Georgia Power, Morgan Keegan (Raymond James) and Turner Broadcasting, among others. Dhawan has directed impact analysis studies for Amgen, Northrop Grumman, LA Development Corporation, the California Automobile Import Alliance and the California Energy Commission.
Frequently contacted by the media for his economic analysis and expertise, Dhawan often appears on CNN, CNBC,MSNBC, the Bloomberg Report and the Atlanta affiliates of ABC, NBC, CBS and FOX. He is sought after for many national and regional publications, including The Wall Street Journal, BusinessWeek, Investor’s Business Daily, USA Today, Los Angeles Times, Washington Post, Atlanta Business Chronicle, Atlanta Journal-Constitution and national wire services including Associated Press, Reuters and the Dow Jones News Service.
Dhawan regularly contributes his U.S. forecast to well-regarded surveys such as Bank One Economic Outlook Survey, Blue Chip Economic Indicators, Federal Reserve Bank of Philadelphia’s Livingston Survey, Federal Reserve Bank of Philadelphia’s Professional Forecaster’s Survey, National Association of Business Economists Outlook Survey, USA Today Forecaster’s Survey and a number of others.
About Beacham & Company, REALTORS®
Beacham & Company, REALTORS® is an independent, locally-owned, full service residential real estate brokerage firm that specializes in Atlanta luxury real estate. The firm is located in the heart of Buckhead at One Buckhead Plaza next to the St. Regis Hotel and across the street from Buckhead Atlanta shopping district. With more than 90 licensed sales associates, Beacham is the top selling office in Atlanta by dollar volume of listings sold and its agents are the most productive by dollar volume of real estate sold.