Area real estate executive Frank Norton Jr. delivered his annual economic report Tuesday, Jan. 28, citing 10 “game-changing” events that took place in 2019.
Norton, CEO and chairman of Gainesville-based The Norton Agency, spoke to a packed room in Lanier Technical College’s conference center.
Norton, whose presentation is detailed in his Native Intelligence 2020 report, described what he saw as the top economic events last year.
SK Innovation having ‘ripple effect’
SK Innovation, a Korean developer and manufacturer of lithium-ion batteries for hybrid electric vehicles, has started building a $1.67 billion new electric vehicle battery factory in Commerce.
The facility will generate 2,000 jobs by 2025.
“The city of Commerce acted like a deer in the headlights in 2019, defeating almost every multi-family rezoning application presented to them,” Norton said. “2,000 SK employees must live somewhere.”
“We are seeing massive rent increases for residential rentals within a 30-minute drive to Commerce,” Norton added. “Expect gentrification of entire lower middle-class neighborhoods and a changing complexity for both Commerce and Jackson County school systems.”
Downtown developments are ‘cool’
“The advent of suburban malls, retail strips or stand-alone big box users diluted the downtown community impact from 1980 to 2005, leaving boarded-up plated glass storefronts, crumbling sidewalks and dark service alleys,” Norton said.
Today, downtowns are exploding.
Part of what changed is “millennials are longing for a third space — not work, not home, but a third space to hang out,” Norton said.
But also, aging baby-boomers are “seeking the very same thing.”
“Today, with the waning influence of print media and the emerging power of Facebook, Twitter, neighborhood email blasts, the thundering social media-driven roar is affecting traditional growth decisions,” Norton said.
“The normal course of a community’s business is now sliced, diced and dissected, and our elected and paid leadership is all but tarred and feathered.”
Residential lot inventory is low
“The good lots in good locations in regard to schools, market, terrain have all been snapped up, built on and absorbed over the last 10 years,” Norton said. “Those remaining in that category are commanding strong prices and are providing strong returns.
Most new homes are in “in-fill” locations and age-related, such as active-adult, developments.
“We hate to be the harbinger of bad news, but new home prices will never be as cheap as they are today.”
Crashing land prices
“Land prices are crashing in specific markets where the anti-growth, anti-density mood has taken a stronghold,” Norton said. “Larger lots do not mean larger homes. They do mean less density.”
He added: “Density is not an evil Darth Vader and lot sizes in all communities should be varied toward development in multiple price points and housing profiles.”
Homes built for rentals
Norton research shows that 15-25% of North Georgia’s foreclosure inventory in 2009-11 was purchased by investors converting them to rental homes.
Meanwhile, apartment vacancy in recent years has dropped, “with a growing relocating labor base and organic population expansion.”
“Single-family rental homes … has become a separate investment product much like multi-family, retail offices and industrial … are becoming part of astute investors’ investment portfolio.”
Cooperation between governments
“Counties historically have acted like disconnected postage stamps when planning for growth or when recruiting retail or industry,” Norton said. “Most of the time they can’t fathom what is happening across the imaginary line on the map in another county.”
That seems to be changing.
He cited as an example an industrial development covering land in Hart and Franklin counties.
Emory Orthopaedics & Spine Center
Another health system player announced plans to enter the Hall County market — Emory Healthcare.
The Atlanta-based hospital system has said it is building a $15 million musculoskeletal and sports medicine clinic at the Atlanta Falcons complex in Flowery Branch. The 29,000-square-foot center is set to open to the public and players in the fall of 2020.
“We believe Emory’s toe in the water is a further indication of Hall’s regional importance and more Emory Healthcare divisions will come,” Norton said.
Senior living’s rise in prominence
“Whether active adult communities, personal care homes, assisted living or age-restricted, senior Housing has emerged as the golden child of acceptable development,” Norton said.
“With our powerful regional health care system, North Georgia is ground zero for age-restricted developments.”
He added: “It’s the rage for baby-boomers to downsize square footage, purchase mostly parallel home values and link themselves to future nursing, extended care and personal care homes.”
‘Mega’ is in
Supersized developments are occurring.
He cited Kolter Homes Group’s development of 1,422 acres in Barrow County for 2,600 homes and Reveille, a 509-acre mixed-use development featuring 1,570 homes off Old Winder Highway/Ga. 211 in South Hall.
Norton “sees the trend for big, bigger and still bigger to continue at least another five years, tapering off as the larger sites move into stronger, longer-term hands.”