AVOC.info
Quick-Search:    

Advanced Search


1-10-05 Oconee County Land Prices and Speculation May Be Bubble

Oconee Tax Assessor: ………….. the price tag rises merely because the MPD option exists, according to Oconee County Tax Assessor Todd Paschal………. "We've ranged anywhere between $5,000 an acre to $7,000 an acre for property being bought for MPDs ……… Paschal said.……..  ……………..Even though the buyers may be out there looking, Paschal predicted that the time will come when Oconee land prices stabilize.

COLUMBIA COUNTY:  …..school board members' complaints that they weren't being kept up to speed on the county's growth plans have been answered with the appointment of two school officials to the 30-member steering committee that will shape the next Growth Management Plan.

AVOC

 

January 4, 2005

 

Land Prices and Speculation May Be Bubble in Oconee County

 

By Wendell Dawson, Editor, AVOC, Inc.

 

Over the last couple of years land prices have skyrocketed in Oconee County.  For some of us “old-timers” and veterans of real estate activity in the area, it is somewhat baffling.

 

From recent conversations with persons having a general understanding of the history of development and land prices in Oconee County, one senses that there are many questions about the sustainability of the prices.  

 

The expectation of dense development with MPDs seems to be the cog that has driven the market.  However, some question who will buy all these residences?   If the market falters, will land prices also stabilize or even decline, especially for the foreseeable future?

 

I established my Oconee County Law Practice in 1970.  From the beginning, I did a lot of real estate business: Contracts, Title Work, Deeds, Closings, Water Service Agreements etc.   During that time, I have seen several downturns in the land business.  In the mid-seventies, a number of buyers let the “land go back” to the Seller who held the financing paper on the land.  

 

{I was involved with some real estate traders and investors who would buy a farm in an outlying county in the morning and we would close a sale to another buyer (Atlanta area investors) of the same land in the afternoon at a higher price.  I once heard a key player in that activity describe the land dealings as being like “holding a red hot coal and tossing it to the next guy as quickly as possible and hope we don’t get caught holding the hot coal when it stops….”}

 

In the 70’s, it took a few years for the market to stabilize.   The Home Buyer $,000.00 Income Tax Credit established during the Administration of President Ford around 1975 broke the log-jam of housing inventory.  Before that, a number of builders and developers “went out of business”.  I have many old closed files of numerous builders and developers who “have moved on”.   There was another downturn during the high interest rates of the Carter Administration.   It got better for a while and then another downturn in the late 80’s.

 

Since the early 90’s, we have been experiencing one of the longest booms of the last 35 years.  I had an elderly relative that always predicted downturns.  He would say, “…you can only get so much air in a balloon!”.

 

About three years ago, several Metro Atlanta Developers were buying options or contracting to buy Oconee County land.  However, some sold before actually developing the property after the rezoning.   Some AVOC sources have speculated that the Oconee housing market demand will not support the large number of residences being approved and started. 

 

Taxes are steadily increasing and that will make it even harder to sustain.   Many developers cannot afford to carry debt service and wait for 8 to 10 years for the next boom. 

 

I believe that land for the long term will increase steadily.   I am also happy for some long-time Oconee Landowners who have been able to realize large prices for their land.   Most of the ones I know have gotten their money.  As to housing demand,  how many commuters to Gwinnett or Atlanta will choose to live in Oconee and drive the obstacle courses of GA 316 and I – 20 twice a day?

 

There have been some “big bucks” made by some speculators, many from out of town.  However, I do feel the land price market in Oconee County is artificially supported by an erroneous understanding or belief about the infrastructure capacity and housing demand in the county.   I just hope that none of our good local folks get caught with the “hot coal” when the “balloon pops”, and it will as it always has.

 

See some articles below that deal with some of the dynamics of land prices and taxes.  It does not describe a Utopia.


SEE Related AVOC Articles:

 

2-3-04 Residential Units Increasing In Oconee County

 

4-7-04 Oconee Has Attracted Much Out Of Area Development

 

4-20-04 Oconee Is Building Homes on Fast Track

 

5-10-04 Oconee’s ‘Pot of Gold’ Fuels MPDs & Land Rush

 

6-8-04 Sufficient Oconee Sewer Capacity or More “Smoke and Mirrors”?


The Athens Banner-Herald          December 15, 2004

         http://onlineathens.com/stories/121504/new_20041215071.shtml

As land prices rise, …….
………. Developing trend in Oconee   By Mike D'Avria

………….. the price tag rises merely because the MPD option exists, according to Oconee County Tax Assessor Todd Paschal……….

"Residential land was pretty predictable, up until the MPDs passed," Paschal said. …….. Land prices went up, I would say, probably 50 percent almost overnight for land that was in the area of water and sewer lines."………..

"We've ranged anywhere between $5,000 an acre to $7,000 an acre for property being bought for MPDs based on the (residential) density and whether or not there's going to be any commercial to it," Paschal said.……..

……………..Even though the buyers may be out there looking, Paschal predicted that the time will come when Oconee land prices stabilize.

“I wouldn't be surprised if we might not be reaching a plateau because we're going to have such a large number of lots and houses available. The supply is going to be very much increased from what it has been over the past years," he said………

"What I think we might see this year is that home values might go down because we've finally gotten to the point where we're getting a number of out-of-county builders. We're getting people moving here and putting up homes much faster, ……..

Paschal added that the plateau on land prices may be right around the corner.

"My feeling, looking at the number of rezones that have been done with master-planned developments, if they develop them quickly, I think it could happen next year," Paschal said…………


12-19-04 Property Taxes Rise With Growth

 

The Christian Science Monitor

        http://www.csmonitor.com/2004/1203/p01s01-usec.html

 

December 3, 2004

 

Property taxes rising nationwide

 

By Ron Scherer

Staff writer of The Christian Science Monitor

 

NEW YORK - While fuel prices may be starting to skid, there's another expense closer to home that is upsetting many Americans: rising property taxes. From Madison, Wis., to Bucks County, Pa., the local tax assessor is dipping deeper into homeowners' pockets as real estate prices rise and states share less of their tax revenue with local governments. 

With people starting to receive their 2005 tax bills, the levies are squeezing the middle class and senior citizens - leaving them less to spend on everything from restaurants to roof repair. There is also concern the taxes could particularly hurt the home-buying chances of the young or civil servants such as firefighters. States such as New Jersey now have grass-roots efforts - verging on revolts - for reform. "There is a property tax crisis," says Myron Orfield, a property tax expert at the University of Minnesota in Minneapolis.

 "It's especially bad in states like New Jersey, Ohio, Connecticut, and Illinois, which are property-tax dependent."Part of the problem lies in demographics and the rapid growth of exurban communities. Young couples who can't afford suburban homes have moved to "edge" communities further from the cities. Those are filled with children, and to educate them the communities have to jack up property taxes to build new schools and hire teachers.

"The property tax system accelerates the sprawl," Mr. Orfield says, "and communities are competing for the few [taxable] businesses." The changing demographics have combined with an unusual economic phenomenon: home prices climbing at double-digit rates in some areas.

This would make homeowners happy, except that an increasing number of communities are now assessing property values every year. Factor in changes in state budgets where many governors are still grappling with ways to close budget gaps. One way for them to cut expenses: Reduce funding to local governments. Madison, Wis., is an example …….. 

The city's rising property taxes are squeezing retirees Diane and Donald Brockman, who have lived in the same house for over 40 years. Now, the retirees estimate it takes them two full months of their fixed income to pay their property taxes. "We don't go out to eat, we don't go to theaters, we don't travel a lot," says Mrs. Brockman, who worked as a operating-room nurse for 40 years. …….. 

Mayor Dave Cieslewicz, an unabashed liberal, is sympathetic to their plight. "We've moved away from progressive forms of taxation to more regressive," he says. "This is of great concern to me that the tax structure is less fair."…… "We want fundamental reform of the way to fund schools and municipal services."………… 

Many citizens, especially those on a modest fixed income, clamor for relief. In Schwenksville, Pa., retiree Arthur Fairclough watched his property taxes rise 9.8 percent last year. "It will eventually eat up my total Social Security. We have enough income to cover it now but I'm worried about the future."


12-6-04 School & Growth Issues in Columbia County

 

The Augusta Chronicle

http://www.augustachronicle.com/stories/120404/edi_2733607.shtml

 

December 4, 2004                                EDITORIAL

 

Growth lessons

 

Columbia County school board members' complaints that they weren't being kept up to speed on the county's growth plans have been answered with the appointment of two school officials to the 30-member steering committee that will shape the next Growth Management Plan.

 

Trustee Regina Buccafusco and county school Superintendent Tommy Price not only will be kept informed of what's going on, they'll also have a hand in guiding the county's residential and business growth over the next five years. This makes a lot of sense, and should have been done sooner.

Good schools are arguably the No. 1 factor in the explosive growth of Columbia County. It's certainly a main reason so many Richmond Countians are fleeing there. Hence, it was ridiculous for school officials to be kept in the dark.

Knowing where growth will occur is important in figuring out how much to spend each year on hiring new teachers, and in determining where new schools have to be built to relieve overcrowding. …………. Planners have to be sure as new residential neighborhoods take shape that there is affordable land nearby for the school system to purchase.

There also is the matter of the school board putting aside enough money to make the land purchases and pay for construction. This should be included in the growth plans, too.  If schools are to continue driving economic growth, they must have a say in the community's future. Including Buccafusco and Price on the steering committee should ensure that everybody's learning their growth lessons from the same book.


Quick-Search: