Economist: Albany to outperform nation in mild recession
ALBANY, Ga. (WALB) - According to the University of Georgia’s economic forecast, we are bracing for a recession this year in Georgia. But it’s likely going to be mild and short thanks to a strong labor market and a dual Federal Reserve Mandate.
Economists said that Albany will perform better in this mild recession than the nation. That’s because of economic development pipeline projects circulating throughout the state and Good Life City.
“Things that are happening globally are affecting the national economy more than they are affecting rural communities,” said Dr. Ngwafu Peter, Albany State University education and professional studies professor.
Big projects such as the 2022 Thrush Aircraft Expansion have helped bolster the city’s economy. On a state and national level, improvements in inflation rates are keeping economists hopeful for a better turnout during the recession.
“We are all hoping that the inflation is going down and it’s currently going down. Inflation is now at 6.5%. That is down from the 8.5% that we had at the beginning of the year,” Peter said.
Despite these improvements, business owners said they’re already preparing for the worst, with post-pandemic reality setting in.
“Whether the economy is way up or way down, we do have impacts to supply chain and labor. That’s probably the biggest impact to us is the labor market, so I have concerns with what the recession might do not only for our business but also for the employees that work with us,” Jud Savelle, president of Bishop Clean Care, said.
Last year, economists said Albany lost almost one out of every five office government jobs but this year they expect increases in the overall job rate. While Albany won’t escape the recession, the city is expected to have a better turnaround in 2024.
The housing market is not going to be the center of this mild recession. Rent is still high but we are expected to have a 12% drop in home prices. However, in 2022, homes were up 46% compared to pre-pandemic prices.
A 12% decrease still leaves a 34% rise in home value. Unless you bought or built a home recently, the small, expected drop in prices will merely be a paper loss. Although there’s a threat of a short recession, Peter said there’s a new opportunity for Albany residents.
“Many more people can afford affordable housing here in the area,” he said.
Economists also predict there won’t be another housing bust. But right now, home loans and home applications have slowed down due to higher home prices streaming into the new year.
Jill Creech, Synovus Mortgage market sales leader, said they are beginning to see more activity with a drop in price on the way.
“So they can offset that a little bit with the rate. They also have a little bit more confidence they didn’t overpay for a home as well,” she said.
Over the past three years, realtors have also seen more cash buyers than ever before. That’s because they aren’t seeing people from other areas sell their homes for top dollar and move to Albany and pay a lot less.
“What set us up for that recession to affect housing so much previously was because there were so many bad mortgages out there and this time, we don’t have that,” said Amanda Wiley, Albany Broker realtor.
Wiley added that she expects the predicted mild recession not to be nearly as bad as the one during the pandemic.
“That really doesn’t worry me. I think all projections are still that our housing numbers will still be higher than pre-covid, even if we go into a recession,” she said.
Economists predict the mild recession will last for six months. Economic recovery is expected to start strong in 2024.
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