The Burst Bubble

It’s a sign of the times.

Vacant businesses. For sale signs. Parking lots with weeds pushing through the cracks.

There’s no denying it. The real estate market is not thriving in Athens.

Reports of its death, however, have been greatly exaggerated.

While other markets have been in freefall, average residential values in Athens sagged only slightly during the last five years, from $62,184 to $58,990, according to data recently released to Athens Patch by the Athens-Clarke Tax Assessors Office.

 Stagnant property values shrink government coffers and lead to cutbacks in public expenditures, but local experts agree the outlook here is less bleak than other parts of the country.

"Athens is not dead,” Realtor Don Sumner said. “What you find are scattered empty spaces.”

Residential properties are definitely selling more slowly, Athens-Clarke Commissioner Alice Kinman said. “That’s true in Five Points and anywhere else.” But they are selling, Kinman adds.

 A $390,000 home in her Five Points neighborhood - where people tend to hold on to properties or hold out for 1990s asking prices - recently sold after an extended period on the market, she said.

Like many college towns, in Athens a high concentration of reliable jobs and a steady supply of college-age consumers helps keep the real estate market afloat, if not absolutely healthy.

 Athens never overbuilt its housing stock the way the metro Atlanta area did, and that helps too, Sumner said.

 Hardest hit are homeowners who invested in pricey homes in Athens and Oconee and are now finding it difficult to sell in a market where banks aren’t lending.

 According to newly released data, 28,699 residential lots sit empty in Athens, up slightly from 28,008 unimproved residential parcels five years ago - a 13 percent vacant-parcel rate that appears to be holding steady.

 “The vacancy rates are lower than other harder hit communities,” said Teri Evans, a community economic development coordinator with the ACC Housing and Economic Development Department. “As to the vacancy rates of unimproved residential and commercial parcels, we are still absorbing our inventory of existing homes and improved commercial properties. We won't see as many new housing or commercial projects until the market is more stable and demand is greater than our supply.”

  “I think that’s a pretty good picture of what you see across Northeast Georgia, and perhaps the whole state,” said Athens-Clarke Commissioner Kathy Hoard, whose own Five Points home dropped in value this year for the first time in 32 years.

By the numbers, the commercial market in Athens is doing less well than the residential sector, although clever adaptive reuse projects can be seen popping up in neighborhoods and on high-traffic business corridors such as Broad Street.

Almost a third of business parcels in Athens are listed as vacant or unimproved by the assessor’s office. Average commerical values rose from $298,007 in 2007 to $301,533 this year, according to the assessor's office. The total tax digest – or taxable property values -  dipped from $4 billion in 2007 to $3.8 billion in 2010.

 The commercial market has been “worse in the last year,” Realtor Sloan Nichols said. Businesses continue to be uncertain about the state of the economy, and are slower to commit to long-term leases, Nichols said. “It’s a tough market,” she said. “There aren’t that many tenants chasing the space.”

  Consider Five Points, once the crowning glory of the Athens real estate market. Here and there, commercial parcels have gone vacant and stayed vacant. There’s the empty gas station on South Lumpkin and Wilcox, owned by an absentee landlord in Atlanta. There’s the unused carwash a block away, providing extra parking to overflow crowds at the popular restaurant Cali ‘N Tito's, but otherwise serving no purpose than to harbor weeds and roaches.

 Treeless and abandoned looking, the small blighted stretch of South Lumpkin in the otherwise pretty district is another sign of the economic downturn, says Kinman, who represents much of Five Points on the ACC Commission.

  Plenty of people have ideas for improvements on that block, such as a mixed-used residential and commercial area incorporating the restaurant, but, she said, “you just can’t get funding.”

 Unless in-town neighborhoods embrace more parking, or a trolley system to allow for greater foot traffic into neighborhoods, dense urban-style renewal - with plenty of mixed-use buildings - is going to remain elusive for neighborhoods like Five Points bidding for greater crowds of shoppers and diners, Sumner said.

With commercial vacancies scattered, businesses looking to locate in prime areas such as downtown and Five Points are not finding the space they need -  large spaces of 5,000 square feet or more – and that’s an economic development problem, Sloan Nichols said. “That and the parking issue,” she said.

 Evans said the county is currently considering adopting an Urban Redevelopment Plan which would allow the redevelopment of key commercial districts that are affected by high vacancy and other adverse conditions.

 The redevelopment designation would make the county eligible for such programs as job tax credits for businesses to promote job creation within designated areas.