Tim Barnes considers himself lucky he’s a pastor in this housing market. It seems like you need faith to find the right house in Newton County these days.
The county on metro Atlanta’s eastern edge has a record-low number of homes for sale. Bidding wars for the few homes that trickle to market are common. And there’s little construction in the works.
All this is taking place as the county is bracing for a wave of new jobs brought by a planned pharmaceutical plant.
“The market is so tight here, if you don’t move on one you like immediately, you’re out of luck,” said Barnes, who is closing next month on a spacious house after months of searching.
Other pockets of metro Atlanta are grappling with similar issues, but the challenges facing Newton are perhaps the starkest. It’s created an awkward side note to a celebratory time.
Newton won the jobs jackpot when Baxter International chose a site at the edge of the county for a $1 billion pharmaceutical plant. It’s expected to bring 1,500 jobs by 2018, and some advance hiring is already underway. Many here are concerned many of the workers will live elsewhere due to the lack of homes.
“Newton County is like the dog who chased the car and caught it, but doesn’t know what to do with it,” said Frank Norton, who runs real estate brokerages across the region. “But in this case, the dog was chasing the car, and all of the sudden he caught a semi-truck.”
Local realtors say homes between $150,000 and $300,000 have almost evaporated, a situation which 10 years ago would have led to a building boom. But now credit is tight and few lenders are willing to back residential projects. Even builders who can finance on their own are uncertain where and what types of homes they’d build.
Newton has about five months of supply of available houses. Most other metro Atlanta counties have at least double that, according to the Metrostudy research firm.
So far that shows little sign of changing: After reaching a peak of 2,400 new housing starts in 2004, there were only 28 permits so far in 2012, according to real estate data firm PalmNumbers.
Frustrated homebuyers and realtors pick through foreclosures or scramble to compete for the few re-sales hitting the market. Tami Moody, a broker with Coldwell Banker in Covington, said she and others are waging a quiet campaign to encourage homeowners who are ready to move to list their homes so there’s supply for new Baxter employees.
“Our fear is that they won’t move to Newton because there’s not enough houses here,” she said. That would deprive the county of some of the tax base boost and other economic benefits of the Baxter plant, which will be located off I-20 about 40 miles east of Atlanta.
Newton and three neighboring counties chipped in more than $100 million in perks to land the plant, much of that from a 15-year tax abatement program worth $94 million.
Real estate circles buzz with stories of bidding wars and competitions for listings. In one recent case, four bidders fought for a house listed in the high $100,000s. The winning bid, to much shock, went $20,000 over the other competitors.
RE/MAX broker Scott Alexander said there are about 430 listings in the county, about one-third the stock of a few years ago. Many are below $100,000; owners of pricier homes are reluctant to sell because they owe more on their house than it’s worth.
“It’s tight,” Alexander said. “There’s plenty of buyers, but the biggest issue we’re facing out here right now is we have plenty of homeowners who would be sellers, but they’re underwater.”
Local politicians are already trying to market different areas of the county to potential buyers by taking would-be Baxter staffers on tours, even though most Baxter jobs won’t be filled until 2014 or later.
“We’re trying to protect the good things, but we also don’t want to miss the boat with all the new people who could move here,” said Kathryn Morgan, outgoing chairwoman of the Newton County Commission.
Morgan said that, despite the cost of added services, Newton not only welcomes but wants workers to live in the county because of the addition to both the local economy and the community.
Even so, homebuilders are reluctant to dive in, especially with distressed properties selling for a fraction of the cost of a new home.
“You can’t build a house now in Newton County and try to compete with foreclosed properties,” said Genevieve Compton, the executive director of the Newton County Homebuilders Association. “It just won’t appraise.”
Many contractors who have the capital to break ground don’t think it’s worth the risk, she said. There’s added uncertainty over what type of housing is needed for the new employees at the Baxter plant as well as the spillover jobs created by the Caterpillar plant in nearby Athens.
“Where the people will come from and who they are, we just don’t have a clue. So all we can do is try to prepare,” said Compton. “The county may be ready for the influx, but the builders just aren’t. They don’t have the funds and they don’t know who they’re building for yet.”
Barnes thought he’d have his pick of big homes at cheap prices when he moved to Covington late last year to take a job at a local Baptist church. He realized how tight the market was after a few failed bids.
“Lots of times we were a day late and a dollar short,” he said.
A few weeks ago Barnes and his wife found a three-bedroom house with a basement on a 2.5-acre lot on the east side of Covington.
“My view on life is to be patient and trust in God,” said Barnes. “I tend to be a plodder. I keep on plodding along and it’s going to work out eventually.”
About the Author
