Newspaper Page Text
PAGE 1t2A PICKENS COUNTY PROGRESS THURSDAY. SEPTEMBER 23. 2010
Continued from Page 1A
Hay pastures
for it,” he said.
Chief Tax Appraiser Roy
Dobbs defined the real estate
problem facing North Georgia as
a “stocking problem.” Similarly,
Nealey referred to it as an inven
tory problem, “like a car dealer
with 500 of the same model on
the lot.”
“We kept building when the
faucet shut off and sales slowed,
we kept going,” Nealey said.
“There was a belief that the
mountain property, with a con
stant appeal that had already
sheltered us from previous
downturns, would help us avoid
this big collapse.”
But the national real estate
slowdown did find its way to
Pickens County and right as
many new developments were
just getting underway.
Payne, who does property ap
praisals for a living, said at this
point it is hard to find any com
parable sales for many types of
property, including large tracts or
upscale homes, as these type
properties just aren’t changing
hands.
According to Payne, no home
priced at $400,000 or higher has
sold during the past year in Pick
ens County, except for homes in
the Bent Tree or Big Canoe sub
divisions.
With 20 years of real estate
experience, Payne said he had
not seen a time when raw land in
Pickens County would not
sell—before now. “I have never
seen a time where you couldn’t
sell dirt,” he said.
Payne estimated that raw land
prices are now reduced by half
from where they were at the peak
of the boom cycle, a point he
identifies as late 2006. Payne
said real estate values are now
about what they were in the years
2000 and 2001.
In the tax office, Dobbs said
sales continue to come through at
roughly market level, but not in
the quantity they once did. He
said finished home prices haven’t
fallen that far, as it still costs
about the same amount to build a
house regardless of whether a
boom or bust cycle exists.
Dobbs said one change he has
seen with real estate sales is that
buyers are now mostly “end-
users; someone planning to live
on the property. The speculators
are out of the game,” he said.
Dobbs estimated that for raw
property the current going rate
per acre is around $8,000 to
$12,000, down from the typical
average of $12,000 to $15,000 an
acre a few years back and off the
high of $17,000 to $18,000 at the
peak.
Nealey said it’s hard to know
what property is currently worth
with sale prices all over the
board. “We have to wait for it to
settle down some,” he said.
Concerning the large tracts
now in foreclosure, none of the
experts interviewed would spec
ulate much as to what may ulti
mately happen with these parcels
through foreclosure or by return
ing to bank ownership.
“That’s the question we all
want to know,” Dobbs said, re
garding the hundreds of acres
now in default.
Barnes said he doubted the
developers or banks left holding
the land would be furnished
many options. There are few
people now in a position to buy
or hold such large parcels, even
at a good deal, because too many
acres are involved. Even at a
greatly reduced price, parcels of
400 or more acres will exceed a
million dollars in price.
“It’s a fact of life, not many
people can carry that load [of
debt],” Barnes said. “It’s quite a
pickle.”
Nealey perhaps best summed
up the cycle of North Georgia
real estate with his response.
“We’ve seen property that were
hayfields and planned for up
scale subdivisions now being
viewed only as hayfields again,”
he said. “Nobody knows what
will ultimately happen to the
property. It’s back to raw land.”
Adding to the uncertain future
for the large tracts is the fact
many developers “are out of the
mix” due to other foreclosures,
bankruptcies, and the realization
there may be small demand for
new residential housing sites for
years to come, according to
Payne.
Dobbs seemed the most opti
mistic, saying some of these
large properties could be bought
for farms or estates or cut into
smaller parcels (20 to 50 acres)
that might appeal to a family or
an investor.
Dobbs painted a best-case
scenario of developers able to sit
on the tracts they are holding or
even able to buy some of the
larger foreclosed properties as
future investments. Historically
in times like this, investors
“stock up on future inventory,”
Dobbs said.
Nealey and Payne both said
the real estate collapse is creating
a banking problem which may
have a broader impact. Banks are
hampered from making other
loans due to the real estate losses
they have endured.
Nealey said FDIC regulations
make it tough on banks with
rules on how long they can hold
a piece of property. Banks also
face stockholder pressure to turn
profits and pay dividends. Fore
closed homes held by banks also
cost banks money, as houses re
quire insurance and maintenance.
“If there were one or two
[houses], it wouldn’t matter, but
all the banks have too many
[houses],” he said.
Nealey said banks are forced
to explore new ways to dispose
of the homes and properties
they’ve taken back in foreclo
sures. He noted again how fore
closure is considered the
absolute last option for banks, as
it immediately puts a drain on
their profits.
“The banks that survive will
be innovative enough and strong
enough to figure out ways to re
solve these problems, probably
by means they have never had to
try before,” he said.
While Payne didn’t see a di
rect impact from so many large
tracts in foreclosure at one time,
he expressed grave concern that,
if all these bad loans cut into the
banks’ ability to operate, “the im
pact could be huge.”
“The community banks are
the lifeblood of a rural commu
nity,” he said.
Payne said he is encouraged
Crescent Bank was taken over
(after FDIC forced closure) by
another bank whose management
leaders appear “to be bankers,
not investors.”
Still, if other banks (not just
banks in Pickens, but banks hold
ing loans on Pickens real estate)
were to fail and be taken over by
investors who sought to quickly
unload all the problem proper
ties, the effect could be cata
strophic. “If you get investors
who just dump stuff, prices will
plummet,” he said.
Dobbs, while generally more
optimistic, expressed the same
concern. He said a bank that has
been closed and re-opened
through an FDIC deal can sell a
property for much less than the
original loan amount and still
come out ahead, due to FDIC in
volvement.
Dobbs expressed the same
warning that if banks started
dumping large tracts at a fraction
of their original appraisal, it
would cause values to tank
across the board.
Dobbs and Barnes noted that
in some cases it is better that
large tracts were foreclosed upon
while still raw land. Both said the
complexities of foreclosing on a
future subdivision rise drastically
when a few houses have already
been built there.
For zoning, usage, and even
appraised value, large tracts en
tering foreclosure while still in
the planning stage of develop
ment and physically unchanged
maintain a continuity and even
offer a bit of greenspace for those
living around them, Dobbs said.
Barnes said problems may be
expected when you see a planned
100-home development change
hands through foreclosure after a
few homes are sold. One issue is
that if a subdivision reverts to a
bank, original covenants may be
void. The new owners can do
anything they wish that is al
lowed under government zoning
regulations.
“It can have a pretty dramatic
impact, especially when people
have already bought, and there
are vacant lots,” Barnes said.
“When you have a development
that is supposed to be 100 homes,
and you get six to eight built, and
then some other developer comes
in, they can change the character
as long as it falls within zoning.”
Barnes said this scenario is
pretty limited in Pickens County
but is becoming distressingly
common in counties to the south.
Those interviewed for this ar
ticle were generally pessimistic
on the short-term future of North
Georgia real estate.
Payne said there are other fac
tors he believes will continue to
hold the market down, and, scary
as it seems, we may not be at the
bottom. Payne specifically noted
the wave of price drops and fore
closures may only be beginning
for commercial projects, particu
larly if no improvement is seen
in employment.
“There will be a continuing
downward spiral if we don’t get
people back to work,” he said.
“You are going to see more com
mercial vacancies.” Payne noted
that continuing commercial va
cancies would further increase
unemployment, leading to even
tougher conditions. “The thing
just keep feeding on itself,” he
said.
At one point, Payne refer
enced the ghost towns that devel
oped after gold rushes played
out.
Nealey also said the “blood
bath” for investors in commer
cial and residential real estate
isn’t coming to an end any time
soon. He said speculators who
invested frivolously are already
out, and sadly, foreclosures are
now striking many solid busi
nessmen.
“We haven’t hit the bottom,”
he said. “I wish I could be up
beat, but I’m trying to be honest.
There is a little more flushing out
to go. Unfortunately now we are
flushing out good people, people
who were not arrogant, people
who always took care of their
business.”
Nealey said what is needed
now more than anything is “to
put the American Dream, the
American spirit back into the
system.” He said leadership at
the local level, all the way to
Washington, and not just with
political figures is lacking and
must be developed for the turn
around.
Missing
Mixed female dog,black
and white, weighs
around 55-60 lbs. Has a
shock collar on. She has
bobbed tail. Last seen on
Walnut Road, Jasper
Please Call
779-893-7368 if found.
Thanks.
Comes by the name
Chloe
Dr. Robert Henry
CONCERT PIANIST
PRIVATE INSTRUCTION
Jasper, GA
W 770-735-PIANO(7426)
Efl www.RobertHenry.org
Robert@RobertHenry.org
ri\ orth
Weddings,
Airport Service,
rUeorgia
Anniversaries,
Limousine
Special Occasions
Office: 770-735-2685
• Cell: 770-893-7306
northgalimo@yahoo.com
Join the winning team
with an ArtCarved
Class Ring!
Weeks Jewelry & gifts
57 N. Main Street, Jasper GA
706-253-9211
www.ArtCarved.com
Comprehensive Cardiac Care
Close to Home
Cardiac Rehabilitation
Piedmont Mountainside Hospital is pleased to announce the
addition of cardiac rehabilitation services. This program is designed
for those who have recently experienced a cardiac event or have
multiple risk factors for heart disease.
Under the supervision of a physician, the cardiac rehabilitation
staff combines prescriptive exercise with risk factor modification
educational services.
Cardiac Services
• Cardiac Stress Testing
• Cardioversion
• Diagnostic Cardiac Catheterization
• Echocardiography
• Pacemaker Implantation
• TEE (Transesophageal Echocardiography)
• Vascular Testing
You will learn about:
Strengthening your heart
Reducing your risk of future heart problems
Improving your overall health
Exercising safely
Eating heart-healthful
Minimizing your stress
Enrollment in the cardiac rehabilitation program requires a referral from your physician.
State-of-the-art
cardiac catheterization lab
For more information on cardiac services provided by Piedmont Mountainside Hospital, please call 706.692.2441
or visit piedmontmountainsidehospital.org.
Did you know that there is a Piedmont Heart Institute Physicians office near you?
Blairsville
123 Weaver Road • Suite B
Blairsville, Georgia 30512
Phone: 706.439.6380
Blue Ridge/Fannin
2855 Old Highway 5 • Suite 106
Blue Ridge, Georgia 30513
Phone: 706.632.2066
Blue Ridge /Riverstone
101 Riverstone Vista • Suite 217
Blue Ridge, Georgia 30513
Phone: 706.636.6500
Canton
1320 Oakside Drive • Suite 101
Canton, Georgia 30114
Phone: 770.720.2383
East Ellijay
309 Highland Parkway • Suite 201
East Ellijay, Georgia 30540
Phone: 706.636.6500
Ellijay
79 S. Side Church Street
Ellijay, Georgia 30540
Phone: 706.636.6500
Jasper
220 J.L. White Drive • Suite 100
Jasper, Georgia 30143
Phone: 706.253.8001
Murphy
145 Medical Park Lane • Suite I
Murphy, North Carolina 28906
Phone: 828.837.3684
nn PIEDMONT
=2= MOUNTAINSIDE
□U HOSPITAL
fin PIEDMONT
SS HEART
IF INSTITUTE n*
piedmontmountainsidehospital.org
piedmontheart.org