While some areas of the country worry about the effects of a possible real estate bubble, Georgia can thank two groups of homeowners for its solid residential market - call them halfbacks and fullbacks.
Halfbacks have been a mainstay of the Carolinas market for years (the name derives from snowbirds who flee New England for Florida's sunshine, then move halfway back). Though in Georgia they might more accurately be called quarterbacks, the trend is the same, and the state is attracting a large number in both the south (especially from Savannah to the Florida line) and the North Georgia mountains.
Fullbacks aren't unique to the state, either - they are the singles and empty nesters moving back inside Atlanta's Perimeter from the suburbs and exurbs. That return to the city is, as Atlanta developer Jim Borders notes, a literal "change in direction" that's happening all over as people seek to find community - and escape traffic and wearying commutes.
Broker Judy Presley, who owns Keller Williams Realty Lanier Partners in Gainesville, has been traveling the state in her capacity as 2006 president of the Georgia Association of Realtors. And everywhere she goes, she hears the same story. "Most everyone I've talked to has a pretty steady market," she says. "It's not booming, but it's not declining."
That's true even where you might expect a slowdown - in Hinesville, for example, where the deployment of troops from Fort Stewart could hurt the market, Presley says she hears just the opposite: "Property is at a premium. The minute they list something, it sells."
Close To The Coast
Likewise, in Camden County, the real estate market has weathered some economic shocks, including the 2003 shuttering of the Durango Paper Mill. "We were worried when the mill closed," says Linda Cook, a realtor with ERA King's Bay Realty and a regional director for the Georgia Association of Realtors. "But actually home prices have gone up." A new company, Express Scripts, brought jobs to town. And now the mill site is poised to become one of the hottest real estate developments in a very hot area.
LandMar Group, which has a number of residential, commercial and mixed-use developments in Florida as well as two in St. Marys, bought the mill site on the North River in December for $36.5 million and plans to create 720 acres of homes, shops, restaurants and offices (with the emphasis on homes).
Turning a rusting mill into upscale homes and shops is a familiar story to Atlantans, who have watched the old Atlantic Steel site in Midtown be transformed into one of the city's most coveted addresses. But it's a new one along the state's coast, where for years any development was slow.
That's due in part to geography, and the state's protection of its coastline. "Southeast Georgia missed a lot of the past growth driven by baby boomers and retirees because the state did a pretty good job of preserving the entire coastline," says Jim Cullis, LandMar's regional manager. "Developers haven't had easy access to beaches as we did in Florida. Those areas are all developed now, and people are moving inland. So all of a sudden Georgia has some great riverfront property and what we call edge property, which is marsh front."
In fact, the whole corridor between Savannah and Jacksonville is poised to become a destination for retiree living, according to a study done by Permar Inc., a national real estate research firm. Cullis ticks off the draws:
"You have great natural resources. You are close to a major metropolitan area, Jacksonville. People want a quieter, simpler lifestyle and you have that in Southeast Georgia."
It's too early to know exactly how the mill site will be reborn - LandMar has to complete environmental studies and determine what cleanup will be needed at the potentially contaminated site. "It's the last great piece of property on the water," says Cullis, who adds that it will "take a lot to get it cleaned up." He says the company will likely make use of Georgia's brownfield redevelopment program. And the company plans to "build consensus about [what] people see there. St. Marys has this great small-town feel, so our job will be to create a mixed-use village that feels like St. Marys already feels."
The North Georgia mountains have always been a popular retirement and second home spot, and demographics as well as prices favor the area. "You can still buy a pretty big piece of property for a reasonable amount of money," says Krista Holloway, a realtor with the Dawsonville office of Gainseville-based Waters Realty and a regional director for the Georgia Association of Realtors.
Lake Lanier is still going strong, buoyed by an end to the drought and simple supply and demand (there are only so many boat docks along the lakefront). Golf course developments such as Chestatee, on the lake, and Gold Creek offer upscale amenities and proximity to Atlanta's shops and restaurants.
The Georgia 400 corridor has really expanded growth in the area, Holloway says, and it's not going to stop anytime soon. "I've heard a lot of people nationally talking about a bubble," she says. "Do I think there's a bubble that will burst in this area? No. Do I think the market inflates and deflates? Yes. But I don't see a bad market year."
In fact, she worries more about growing pains. As more people move in, schools could become an issue, as well as affordable housing and the availability of starter homes. "It's going to be difficult for developers to find land reasonable enough to build starter homes, and industry will need them," she says, noting that a Wal-Mart and Home Depot will soon open. "It's nice to see the growth happening here," she adds. "But I'd rather not go through what Forsyth and Gwinnett counties went through in terms of growing pains."
Some of those growing pains are being felt in White County, where a Mountain Protection Ordinance (MPO) was passed last year to control development in the area. The first of its kind in Georgia, the MPO applies new building regulations to private property with a slope above 25 percent. The debate was contentious, with supporters of the MPO claiming the regulations were needed to protect the region's natural beauty that draws both tourists and residents, and those who opposed it claiming the new strictures are so severe they would drive new construction out of the county.
The MPO limits apply to clearing and grading the land, as well as the height of the house, and its color. Cutting 50 percent of the trees on the land (excluding those cut for the footprint of the house) triggers a requirement to replant; painting a house a color - such as white - that doesn't blend with the natural landscape will require that 50 percent of the house be shielded by trees. The county commission adopted a map that specifies which areas would be affected (about 9 percent of the county's land).
Noting that White County is one of the fastest growing in the state, Commissioner Chris Nonnemaker says the intent of the ordinance is to preserve the natural beauty of the area, which will in turn preserve land values. There is disagreement about whether the MPO will increase construction costs; Nonnemaker says he doesn't believe it will. "The building codes remain the same, "he says. "You have to do a little more planning ... . People get to make choices. If you choose to clear-cut and paint your house day-glo yellow, it will cost you more."
The ordinance is likely to be challenged in court. In nearby Dawson County, Holloway says she understands the impetus behind the ordinance, but "I'm not sure you can legislate beauty," she says. "I don't think it will have much effect on who goes to White County, because it's for 9 percent of the land. It's a small amount of land to have such a complicated ordinance."
Coming Back In
Retirees may be heading for the mountains or the marsh, but singles and empty nesters are headed back into town, bolstering the market inside Atlanta's Perimeter. Though it isn't a new phenomenon, it is a recent development in Atlanta.
"Atlanta is the least dense of the 15 major metropolitan markets in the country," says David Boehmig, president of Jenny Pruitt & Associates and 2005 president of the Atlanta Board of Realtors. "There is easy growth going north, south, east and west. In Chicago, by contrast, there is a fairly dense core with significant investment in high-rises. Atlanta hasn't needed to do that, or chosen to. But it is starting to happen."
While many families moved out to the suburbs, seeking good schools, bigger houses and a community for the kids, now empty nesters are reversing the trend. Even Boehmig says he sees the attraction. "I grew up in Atlanta, and I live in Duluth," he says. "But I can see moving back in closer after my children grow up."
Boehmig has noticed demand for high-rise living intown at both ends of the spectrum, from lower-end to upscale condos. Developer Jim Borders, CEO of Novare Group, is betting on that demand. His company has several multifamily developments in the works, including the just finished Twelve Atlantic Station (a hotel and condo combination), Twelve Centennial Park and an as yet unnamed mixed-use high-rise on Irby Avenue and Roswell Road in Buckhead.
"Certainly the charge is being led by 25- to 34-year-old singles," he says. "The first wave of new intown residential development targeted that group. Other groups are following on its heels, and you're starting to see more product directed at empty nesters." In fact, he predicts that will be one of the biggest trends in intown development over the next few years.
Of course, one of the reasons for the migration back to the city is traffic. But more than that, Borders says, people also are enjoying city life - the restaurants, shopping, arts and culture, nightlife. That's why Novare is building three incarnations of its Twelve concept, which combines an upscale hotel with condos, allowing residents to access concierge services and take advantage of room service and other amenities. "People are looking for brick and mortar, but they're also looking for an experience," he says.
Describing the high-profile property Novare is developing in Buckhead Village, just behind the Roxy, Borders says one of the attractions was "the way it feels along the street, with the historic retail there and the Roxy fa?ade. And the proximity to [recently opened] Whole Foods. You really don't have to cook if you live next to Whole Foods."
Even with the action in Buckhead and Midtown and Atlantic Station, downtown may be the true hot spot for residential development. That's certainly what Borders thinks. "I think you could see more development in downtown - or at least as much - over the next 10 years as you see in Midtown and Buckhead," he says.
Borders ticks off the reasons why he's bullish on downtown. "It has a lot of office space. Some is empty, but more is full than empty. A lot of people work downtown. It's got a great park in Centennial Park, and Woodruff Park. And it is easy to develop downtown. It's the easiest place in Atlanta. You even get Tax Allocation District money if you create affordable units."
As more high-rise developments go up in Atlanta, Borders predicts there will be debates about density - even, he says, in some of the areas of the city where you wouldn't expect there to be such debate. "We think density is the silver bullet, so we're pursuing that," he says. "But, look, Atlanta is going to grow a lot over the next 10 years. The question is, where does that growth happen? We hope it's closer to the center of the city."