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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