Two decades ago, Rebecca Carlson's subdivision in Lawrenceville bustled with hard-working, middle-class families. At Christmastime, neighbors lit up their homes with colorful displays. At night, people could walk their streets without fear.
Then subprime mortgages flooded the market, and Quinn Ridge Forest changed. Some new residents let their grass grow 3 feet high, Carlson said. Others let broken windows stay broken. Many longtime homeowners have sold their properties and bolted.
Now, Carlson said, the house next door is filled with renters who come and go. The police have been called to two nearby homes, one for prostitution, the other for illegal drugs.
"I won't let the kids go outside by themselves," said Carlson, 45.
The decay of the neighborhood tracks closely behind the collapse of the housing market. Gwinnett County has become the foreclosure capital of metro Atlanta -- 44 percent of its 10,301 home sales in 2009 were bank sales -- and that foul wave washed over Quinn Ridge Forest, too. At the moment, three of the 12 houses on the market there are bank sales.
The county looks no better in 2010: with 26,502 foreclosure notices for the year, Gwinnett surpassed Fulton, DeKalb, Cobb and Clayton counties, according to Equity Depot, which tracks foreclosure and other real estate trends in metro Atlanta.
Yet, even with the rise in distressed residential properties countywide, Gwinnett's appraised values are still above fair market value, in some cases way above, as Carlson's case illustrates. Carlson and her husband bought their three-bedroom house for $82,000 in 1991. Now, she said, they'd be lucky if the house fetched $70,000. Yet the current tax appraisal values the house at $134,500.
"Good luck getting anywhere close to that," Carlson, an accountant, said. "I think the highest sales price we've got right now in the neighborhood just dropped to $99,000, and that house has been on the market forever."
Overall, Gwinnett's tax appraisers got much closer to matching the market this year than they did last year. Chief appraiser Steve Pruitt said the county in 2010 reduced values on more than 139,000 properties from Norcross to Braselton, and they'll lower thousands more in 2011.
An analysis by The Atlanta Journal-Constitution shows that tax appraisals in three of the five largest metro counties, including Gwinnett, haven't caught up with the slumping real estate market. The newspaper compared hundreds of thousands of tax records metrowide with actual sales prices to see whether property is being appraised for more than it is actually worth.
The typical tax appraisal exceeded the typical sales value by 25 percent in DeKalb, and by 7 percent in Clayton. But Gwinnett's appraisers came in at 2.5 percent over market value, the AJC found.
Still, there are wide swings within individual Gwinnett ZIP codes, the AJC's analysis showed.
For instance, in the 30093 ZIP code, just outside Norcross, county values exceeded the market by 21 percent. In the 30039 ZIP code, just outside Snellville, values were 19 percent above market. In the 30044 ZIP, just outside Lawrenceville, 8 percent above. In other cases, such as 30092, which includes Peachtree Corners, the county was spot on, the analysis showed.
Higher appraisals generally translate into higher property tax bills, and Loganville resident Vera Callender believes she is among those being overtaxed.
A first-time home buyer, Callender thought she struck a deal in 2009, paying $124,000 for a foreclosed property in April 2009. But over the past year, she noticed that more houses in her tidy Shady Grove Plantation subdivision were hitting the market, some as low as $112,000 and most of them bank sales.
"Everywhere you go, it's ‘For sale,' ‘For sale,' ‘For sale,' ‘For sale,' ‘For sale,'" she said. "Everywhere you turn is foreclosure. I've never seen anything like this in my life."
Meanwhile, the county's appraised value for her three-bedroom house hovered around $144,000 this year, down from $188,700 in 2009.
"This house is not worth that, I swear to God," said Callender, 48. "If this house is worth $144,000, I'll sell it at once, right now."
Growth in Gwinnett
In good times, Gwinnett County hummed with new development. Builders added 12,000 new homes each year. Residents poured in by the thousands, and the additional tax revenue paid for more roads, schools and sewer lines, which brought even more growth.
At the same time, Georgia led the nation in issuing substandard mortgages.
Then came the recession and a housing collapse of historic proportions, and Gwinnett's nearly 30-year boom died. Homes, particularly those in newer neighborhoods, went into foreclosure. Bank sales become prevalent.
"The whole situation started with ease of money," mortgage broker Jim Heitzer said. "You had unscrupulous real estate brokers, unscrupulous mortgage brokers that were like, ‘Hey, you got a pulse, we'll get you a mortgage. Your credit's bad? We'll still give you 100 percent.'"
The declines led county commissioners last year to increase the property tax rate by 21 percent to make up for millions of dollars lost in lower assessments. Still, the county cut more than 100 jobs, many from the planning department, and instituted an early retirement program.
Pruitt, the chief tax appraiser, said at the height of the market, 98 percent of real estate transactions were individual to individual. If a neighborhood had enough transactions to show county values were low, assessors went in, established a new appraisal model and applied that model neighborhood-wide, raising home values, he said.
Now the market is down. Foreclosures are rampant. Banks are competing with private sellers, and private sellers are losing out, Pruitt said.
"The banks are selling those properties for some real deals," he said. "In some markets, 75 percent of all the sales that are occurring are bank sales. We are using that information, so we have overall values coming down."
Hub of foreclosures
Distressed properties can be found throughout Gwinnett.
As of Dec. 15, in the 30045 ZIP code, which includes Lawrenceville, 380 single-family homes were up for sale on the First Multiple Listing Service, a database used by real estate professionals statewide. Of those, 59, were foreclosures. In the 30052 ZIP code, which includes Loganville, 520 single-family homes were listed. Of those, 85, were foreclosures. And in the 30096 ZIP code, which includes Duluth, 426 properties were listed. Of those, 30 were foreclosures.
Perhaps more telling are properties registered with the tax records foreclosure activity list, Realtor Rodney Camren told the AJC.
"These are either being foreclosed or recorded as being foreclosed," Camren said. "They are not all in the multiple listing services. It is what’s to come."
In the 30045 ZIP code, 684 properties are registered as of Dec. 15; in the 30052 ZIP, 505; in the 30096 ZIP, 426, according to data provided by Camren.
With bargain-basement home prices, some prospective buyers are considering only distressed properties, Realtor Kristy Hilburn said.
"I have clients who will say, ‘Only show me foreclosures,'" said Hilburn, adding that such properties are concentrated in Gwinnett's newer subdivisions, those built in the past five years.
For instance, the Lawrenceville subdivision of Silver Oak, initially built in 2007, is among the leaders in foreclosures in its 30045 ZIP code. As of Dec. 9, seven bank-owned homes were listed between $182,000 and $190,000. In 2007, homes in that subdivision of fewer than 50 were selling between $230,000 and $270,000.
In downtown Lawrenceville, Cornerstone on the Square -- a mixture of condos, townhomes, restaurants and shops finished in 2009 -- sits virtually empty. As of Dec. 9, 28 bank-owned properties were listed between $190,000 and $230,000. Previously, residential properties sold for $300,000 to $400,000.
‘Give and take'
A self-described "stats guy," Kevin Patterson monitored the slumping housing market for two years. He studied newspaper articles and tracked home sale prices online before buying a foreclosed property for his family in October.
Now as a first-time homeowner in Suwanee, Patterson, 46, has a lengthy to-do list, held in the palm of his hand. Among the items on his cellphone: Program garage door remote. Cancel DirecTV. Wire house for Ethernet. Appeal property taxes.
In 2006, the four-bedroom house in the Baxley Point subdivision was built and sold for $261,900. This fall, Patterson paid $176,000 in a bank sale -- a price he believes is below the home's actual value.
Still, he is not enthusiastic about the county's recent appraisal of $212,000 or the nearly $2,900-a-year tax bill, which doesn't include Suwanee city taxes.
"I'm a realist. I understand the bills have got to be paid," said Patterson, who is retired from the Air Force. "But I think it's got to be a give and take on both the owner's and government's part, especially in this economy.
"When the market's good and going up, they can't say, ‘Wow, look at all this money, money, money, money,' and when the market's going down, say ‘Hey, wait, you can't do that [cut values].' Otherwise, it's just one-sided.
"I'm just looking for a fair assessment."
Hence, the appeal next year.
But Patterson might not have to appeal. According to a new state law, the price of a residential property purchased in 2010 establishes the maximum taxable value for 2011. For Patterson, that figure is what he paid: $176,000.
Wendy Prather is president of the homeowners association for Campbell Glen, an 83-home subdivision nestled between Snellville and Lithonia. Currently on the market are a half-dozen bank sales, she said.
Prather paid about $130,000 for her 1,600-square-foot home. At the height of the market, the house could have fetched $170,000, she said. Now, houses are going for less than $90,000.
Meanwhile, her tax bill has gone up from $1,600 last year to $2,000 this year. Most of that came from a fee for a county-imposed garbage plan that charged residents for 18 months of service in advance.
Regardless, Prather has no plans to file an appeal next year. In fact, she just ignores the numbers, preferring to cut back her shopping and movie-watching while riding out the turbulent housing market.
"Everybody's in the same boat," said Prather, 48. "I figure give it 10 years or so, it'll start coming back."
- Gwinnett: 660
- Fulton: 517
- Cobb: 504
- DeKalb: 356
- Clayton: 123
* The number of single-family homes listed as foreclosures on the First Multiple Listing Service as of Dec. 15. This does not include any foreclosures on the Georgia Multiple Listing Service.
Source: Rodney Camren, STAR Team Atlanta Realty
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