Joe Doto didn’t let the incongruity between his street’s name, Sublime Trail, and the less-than-wondrous surroundings of the Canton subdivision keep him from buying a five-bedroom house three years ago.
“From here on up this hill, all the streets were empty,” he said. “There were no houses.”
Doto, it turns out, bought at just the right time, paying a less-than-premium price for his home an hour from downtown Atlanta. Today, an army of builders ascends the hilly Summer Walk development each morning to build houses for newlyweds, families and retirees like Doto.
It’s back to the good old days for builders, developers and price-conscious homebuyers who all but disappeared from Metro Atlanta’s northern fringe during the Great Recession. Though still well below peak pre-recession levels, new home permits are soaring across a six-county swath of exurban Atlanta.
In addition, a mountainous supply of 40,000 sub-divided, yet vacant and weed-filled lots left by the housing bust is shrinking by the day as homeowners again choose more house and less-crowded urban or suburban lifestyles.
“Now that prices are heading back up, people will go back to doing what they used to do and just drive farther out,” said Eugene James, regional director for Metrostudy, a nationwide housing data firm. “I don’t see that trend reversing itself until we have another housing correction.”
The recession all but halted metro Atlanta’s seemingly inexorable push northward into the relatively cheap and capacious communities beyond Gwinnett, Cobb and Fulton counties. The next-tier counties — Barrow, Bartow, Cherokee, Forsyth, Hall and Jackson counties — registered some of the highest growth rates in the nation in the late 90s and early 2000s. Acres of farmland, easily accessible via interstates, were cleared daily for development and beckoned people who worked closer to downtown Atlanta, the Perimeter, the Galleria and other job magnets.
More than 4,700 single-family residential building permits were issued in Forsyth County in 2006, for example. By 2010 the number fell 76 percent to 1,125.
The drop-off, and the economic impact, was even harsher in the smaller exurban counties. Jackson County saw home-building permits drop 94 percent during those four years.
Ghost towns
Pockets of Jackson and the other counties took on a sheen of emptiness and despair. Subdivisions along Ga. 124, running between Braselton and Jefferson, were laid out with new roads, sidewalks, street signs and colonial-styled lighting. But there were no houses, or only a few surrounded by tall weeds and PVC pipes for never-connected water and sewer lines. Strip malls were half-built or barely occupied.
Homeowners were foreclosed upon in record numbers. Builders and developers went bankrupt. Banks closed, unable to recoup easy loans made during flush times.
Jackson and other counties saw property tax revenue plummet while they remained on the hook for the bonds that paid for the road and sewer projects that first attracted developers. Government officials in Jackson, Cherokee and Forsyth counties said they would use the recession’s involuntary slowdown to better plan for future growth and balance the mix of residential, commercial and industrial development.
“We saw a huge hit to our tax digest and some (residents) thought we had probably lost everything and wondered how we were going to survive,” said Gina Roy, public development director for Jackson County. “Others, though, said this is a good thing, we need this break to get our ducks in a row so that the infrastructure and roads can catch up to all the development.”
Jackson counted 5,909 residential lots with building permits, but no buildings on them, four years ago, according to Metrostudy. Cherokee County, home to Summer Walk, had 6,366. In all, Metrostudy put the number of permitted-but-empty lots at 38,800 across the six counties.
Today, the list has been pared to 29,840, a 23 percent reduction.
“We’re seeing a dramatic increase in the number of new home permits — our inspectors are just swamped,” said Margaret Stallings, the principal planner for Cherokee County. “We’ve seen a lot of the subdivisions that were platted, but with no homes, getting finished with new homes, especially if they’re in a good location toward the south end of the county. The pressure is now moving northward.”
Slack supply
The slow but steady economic recovery propels the new construction. So too does the sparse supply of existing homes for sale.
Half-built subdivisions along Arnold Mill Road in southern Cherokee County are filling up and humming with circular saws and pneumatic nail guns. Surveyors traipse between hillocks of red clay at the Millstone Manor subdivision, though homesites remain available. Just about all the houses (“from the low $400,000s”) across the street at the Millstone at Little River are sold.
Canton, in mid-Cherokee, isn’t far behind the building boom. Seventeen homes are for sale at Summer Walk with prices ranging from $170,000 to $207,000. Sublime Trail is built-out; builders now concentrate on the subdivision’s back lots.
Cherokee issued 744 single-family permits last year — three times as many as the year before.
“This place has just gone nuts,” said Doto, a Boston transplant who moved to be near his kids and grandkids. “In the last three years, they’ve doubled the number of homes. The way it’s going, it will be filled up in another two or three years.”
And then what? Closer-in Atlanta homes are increasingly expensive and harder to find. Home prices soared another 16 percent across Metro Atlanta over the last year, according to the S&P Case-Shiller Home Price Index. More frugal homebuyers, especially if interest rates rise, will likely look farther afield.
“We, as humans, are always looking for the best deal,” said Jackson County’s Roy. “There is definitely still that sprawl mindset.”
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