Published April 27, 2006

Pickens County housing market sees growing prices, more demand for bigger property
By Michael Moore

The average price of houses being built in Pickens County continues to rise, a trend which shows widespread changes in the residential property market say real estate professionals.
As of March, the average price of site built homes permitted in Pickens in 2006 is $237,000, as reported to the county planning commission by director of planning Norman Pope. In 2005, the average price of site built homes permitted by the planning office was $205,000.
And the average price of homes sold in 2005 in Pickens County was just over $180,000, a 14 percent increase from the year before, according to Shirley Fargason, president of the Pickens County board of realtors. The total volume of home sales increased by 29 percent in the same year, Fargason said.
"Now is a great time to be a realtor in Pickens County," said Fargason, who is a realtor at United Country Talking Rock Realty.
While Fargason said rising construction costs are partly to blame for the growing home prices, the pattern seems to indicate more of a demand among home buyers for bigger and more expensive dwellings with more land surrounding them.
Particularly in the speculative housing market and subdivision lot sales, some builders are responding and adapting to the demand for a more high-end product.
Speculative or spec homes, are generally constructed in subdivisions where builders will purchase a number of undisturbed lots, build a house on each one, and put the developed lots on the market in hopes they sell in a timely fashion.
Custom homes, which are built from the ground up under the buyer's supervision, generally cost more than spec homes.
Pope estimates that since 2003, about 550 homes in Pickens County have been built on a speculative basis. That number represents about half of all homes built in Pickens since 2003.
The county planning office, which is in charge of issuing building permits, just started labelling spec home permits as such this year, Pope said. The reason is because they were beginning to notice an "unusually large" amount of homes that are for sale in Pickens.
"It seems there are an awful lot of houses that are not moving off the market," said Pope. "This is why we instituted a method of tracking spec home building permits."
Doing so gives the planning office staff a better idea of which portion of their building permits are for new construction, and which are for renewals from builders whose houses have been on the market longer than normal.
Pope said often a spec home builder will finish most of their construction and wait to install carpet, appliances and other touching up to suit the prospective buyers' desires. The office will issue a certificate of occupancy when a house is ready to be lived in.
In 2005, out of 905 total building permits (including site built and mobile homes, commercial structures, renewals, etc.), 238 were for renewals on site built homes. "That was a substantial increase for spec builders finishing up," said Pope.
In any subdivision, Pope said it is assumed that the majority of homes will be spec homes.
About two years ago, Pope produced a map of new subdivisions whose plats had been approved, though not necessarily with building permits at the time. Based on those plans, the county estimated about 600 lots would be located within the new developments.
A new map was produced in February of this year showing even more new subdivision plans. That map shows 13 new developments and five new phases in existing subdivisions approved since the end of 2004, which are expected to add over 850 new lots to the residential property market.
Starting in the latter part of 2001, those in the market for spec homes were primarily purchasing "starter homes," which typically cost in the $150,000 to $200,000 price range.
Over the following three to four years, spec builders produced a "flood" of such lower-end houses, as one local developer decribed the situation. Now spec homes in that category are selling at a slower rate than they were, and slower than one would generally expect in such a busy housing market.
Tommy Lindsey, realtor at Century 21 Lindsey and Pauley, said over six months ago the first multiple listing service, a realtors' database of local real estate that is for sale, showed 530 homes for sale in Pickens County.
While his firm is not involved in a lot of subdivision sales, Lindsey said houses priced at $250,000 or more are their fastest selling. He estimated their average sales between $200,000 and $250,000 per house.
He said Lindsey and Pauley sells "the complete gamut, from mobile homes to mansions." They mostly sell older or already existing homes.
"A rule of thumb has been the cheaper the house, the faster it will sell. Generally that's true. But if there's a glut of cheap houses it slows down because there's too many to choose from and not enough people choosing," said Lindsey.
One reason is that people looking for a new house whose incomes restrict them to the starter home price range, are not as qualified for loans as they used to be, Lindsey said. He said credit scores are going down among potential buyers, and that slows down the market.
Pope said his office first started noticing a slow-down in starter home sales in late 2004.
He and chief tax appraiser for Pickens County Roy Dobbs, indicated that the best market with the fastest turnaround now is for development houses on three-acre-plus pieces of property. The Preserve at Sharp Mountain is an example of this type of development.
Starter homes are usually built on one- to two-acre lots, and developments containing them are considered "high-density." The current county minimum lot size is one acre per house. But no one expects the hundreds of starter homes on the market to go unsold forever. In fact, of the 850 new lots approved in the last year, Pope said most of them will likely contain lower-priced homes.
In the first four months of 2006, one hundred sixteen permits were issued for site built homes, said Pope. Fifty-seven percent of those were for spec homes.
However, at least one longtime local spec builder has adapted by offering higher-end houses on larger pieces of property.

 Ronnie Mills is in the process of developing and marketing the Jordan's Crossing subdivision on Pettit Road in southeastern Pickens. Houses there are mostly priced at $225,000 and up, and Mills said they sell almost as soon as they are built.
"The best selling properties now are houses in the $280s to high $300s," said Mills, who is beginning plans for an equestrian-friendly subdivision in Pickens with half-million dollar houses on three to five acre tracts.
Mills has been a home builder in Pickens County since 1982, and is used to changing his product in response to changing demand. He developed the higher density Saddle Ridge subdivision during the starter home surge a couple of years ago.
While Saddle Ridge sold out fairly quickly, according to Mills, he said he has noticed other builders having trouble selling their starter homes recently.
Many people looking for new abodes in Pickens County are relocating here from wealthier areas, particularly Atlanta and Florida, said Mills. In general, they have higher incomes and can afford the bigger homes.
"Lots and houses are getting higher here, but they're still cheap compared to Atlanta and Florida. People moving up here can get twice the house for half the price," said Mills.
He noted that construction costs are increasing and new county ordinances result in higher development costs. But Mills does not predict those will be enough to deter the anticipated housing boom.
Mills acknowledged that prospective starter home buyers are finding it difficult to get loans. Also contributing to the stall in the market is the general state of the economy, with rising consumer prices, particularly for fuel.
"People in the market for low-end houses are on a fixed budget," Mills said.
Subdivision developers have to make an educated guess as to how many houses they will build to match the incoming demand. Mills said, "It's all gambling."
But there are certain factors that he believes will ensure a steady market well into the future in Pickens County.
He said the county's close proximity to Atlanta, which is growing itself, and easy access via Highway 515 will bring a higher population. Also the mountains and scenery, and the more rural aspects of Pickens County will draw people from points south for the foreseeable future.
Furthermore, builders look at communities surrounding Atlanta, such as Cherokee and Fulton counties, to see how they have developed.
Shirley Fargason noted that Pickens is in a transition from being a farming and agricultural community, to a "bedroom community" for Atlanta-area professionals and retirees. And many people moving here still commute to their jobs to the south.
"If you had told me ten years ago there would be this many subdivisions in Pickens, and the price of land and homes would go up this much, I would not have believed you," said Fargason who moved here in 1996.
Fargason said she sells houses in the low $100,000s "immediately," but she mostly sells already existing homes outside the subdivisions.
As for the current surplus of spec homes, Fargason said, "It has to be like that to a point because you have to be ready for the growth."
Recent statistics from the U.S. Census Bureau show a 23.8 percent population growth rate in Pickens over the last five years. To most everyone involved in real estate, development, and building, that rate shows the houses on the market will be sold eventually.
Another local developer, Evan Howell, is also moving away from building on smaller lots. He said the three-acre-plus lots are "better all around."
"In high density the only people that benefit will be the developers," said Howell.
But there will be a need for high-density housing in Pickens for a long time.
"People have got to have somewhere to live in their price range," said Howell, who is an owner of L & H Properties. He suggested that not many people who work in Pickens County will be able to afford the higher-priced houses because there are not many jobs here that offer the high incomes needed to purchase such property.
Howell said the county and the City of Jasper should use their land use restrictions to confine high-density housing developments to areas that are the most populated and already developed.
But currently, those seeking to buy from Howell want three- to ten-acre pieces of property with covenants and restrictions, he said.
Despite what may be the hottest seller right now, Pope has said within the next two years the inevitable influx of residents to Pickens County will bring "mass development" of large tracts into high-density housing.
He predicts the developers of such projects will be large national corporations, rather than the local builders who live here and plan to stay here.
But Pickens County chief tax appraiser Roy Dobbs believes that economic factors will continue to limit high-density residential development.
Particularly for those who would live here but still commute to Atlanta, gas prices will likely make them think twice about moving onto a small lot.
"If you already live where houses are stacked on top of each other in an urban area, why would you sell out and come up here to do the same thing, and spend so much money on gas?" Dobbs said. "When all this started, fuel was cheap."
He said people moving here are seeking "quality of life." If it is the mountains and scenery that attract them here, then the home buyers' interest is to preserve the natural setting by owning larger pieces of land, said Dobbs.
Dobbs said the county has a goal of keeping at least 20 percent of all land in greenspace, or undeveloped land. Because generally a house and driveway take up only about an acre, building on bigger tracts helps the county reach their goal.
Also, the more houses there are, the more need there will be for county services and education, said Dobbs. And that could lead to higher property taxes.
"Less government, better environment, better quality of life," is how Dobbs summed up the advantages of lower density housing. "Most developers are reacting to that."
He said the county and the builders should continue to work together to make sure Pickens County is developed in a way that most people accept.