AVOC

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October 2, 2008

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Banking and Taxes - the Housing Slump is Local

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By Wendell Dawson, Editor, AVOC, Inc

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The financial stress demonstrated by the Wall Street crisis does have a local presence, reports and claims notwithstanding.    The over-supply of homes and approved lots are the basis for problems in Oconee County.   There are too many vacant houses and lots.    It will be a long-time before the demand catches up.  

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A banker friend recently commented that the banking crisis will worsen in about 6 months as many development and construction loans come due and can’t be paid.    The slowdown was evident last year as demonstrated by the 2007 unpaid taxes on some land that has had high profile attention in rezones in Oconee County- i.e. Coldwater and Parkside.   SEE LIST BELOW.

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Banks holding loans on houses and developments with vacant lots are feeling the stress.   Common sense will tell you this is not going to turn around overnight.    What will the Banks do with these properties?   Demand is off and will continue to be for various reasons, i.e.: oversupply, gas prices, traffic congestion to work centers, etc.   These expensive tracts of land cannot be used for agricultural purposes so income is nil as long as they are sitting dormant.

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It is time for individuals to monitor their investments as to FDIC insurance and avoid too much in one place.   The Wachovia situation has had a local connection with UGA and college funds.

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Our officials need to be more cautious in spending, debt and zoning decisions.   The “Party is Over”.   Instead of drooling over spending $ 40 Million in SPLOST funds, we need to be concerned about declining revenues and a slowdown, if not decrease, in Digest Growth.    The facts are there.    Ghost subdivisions are impacting this county and it will only become more apparent as the whole economy slows.

10-1-08 Oconee County Taxes Owing for 2007

http://www.oconeecountytax.com/search.aspx

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PLANT A SEED, LLC 

P.O. BOX 369 

Bogart, GA30622

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B-05H-002 - $ 10,491.30

B-05H-001 - $ 116,251.87

B-05H-003 - $ 10,541.03

B-05-025    - $ 9,838.43

B-05-013   -$ 885.84

B-05H-005 - $ 2,874.07

B-05H-004 - $ 801.23

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OCONEE COLDWATER CREEK, LLC

1051 BUSINESS BLVD

Watkinsville, GA30677

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B-05I-001                   $ 24,224.00

B-06S-001OPB              2,798.66

B-06S-041A                   1,093.88

B-06S-042A                   1,093.88

B-06S-043A                   1,093.88

B-06S-044A                   1,093.88

B-06S-046A                   1,093.88

B-06S-047A                   1,093.88

B-06S-002AB                 1,083.88

B-06S-003AB                 1,083.88

B-06S-004AB                 1,083.88

B-06S-005AB                 1,083.88

B-06S-011AB                 1,093.88

B-06S-012AB                 1,093.88

B-06S-014AB                 1,083.88

B-06S-001AB                 1,083.88

B-06S-016AB                 1,083.88

B-06S-050A                   1,093.88

B-06S-051A                   1,093.88

P1-31229- Equip              597.30

Various Listings - Bank Rate Analysis June 08

http://www.bankrate.com/brm/safesound/rating.asp

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AVOC NOTE:The Banks in best condition have the higher number of stars and the lower Cael or numeric rating.   The highest rating is ***** 1.The lowest rating is * 5.

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Research methodology
The Safe & Sound ® ratings system employs a series of 22 tests to measure the capital adequacy, asset quality, profitability and liquidity (CAEL) of each rated financial institution. Individual performance levels are determined from publicly available regulatory filings and are compared to asset-size peer norms, industry standards and key absolute benchmarks. Combined results form the basis for our Composite CAEL and Star Ratings.
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Scoring methodology
Bankrate.com evaluates the financial condition of institutions and assigns a 1-to-5 rating with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or better stars with the majority of banks falling into the three- to four-star range. Aninstitution with an "NR" rating may be too new to rate. The "NR" is not any indication of financial strength or weakness. The Safe & Sound Rating is believed to be reliable but the information is not guaranteed. In addition, events since the information was collected may have altered an institution's financial condition.