In his annual Native Intelligence report, Gainesville real estate executive Frank Norton Jr. used that age old adage, "When life give you lemons, make lemonade."

He made his annual presentation Thursday evening to a crowd of business and civic leaders at the Georgia Mountains Center and presented each one of them with a squeezable foam lemon.

"Seek out those lemons, the unloved homes, the slow developments, stagnant land opportunities," he told the crowd.

In a presentation heavy on optimism, Norton predicted that the economic downturn has reached bottom.

Norton, who follows real estate, marketing and other economic trends, said while we may have reached the lowest point, recovery will be slow.

"We are in a season of white elephants, of projects commenced in good times and bad," Norton said. "The sight of a stalled construction project or half-empty development touches off, even in the most disinterested passer-by, a kind of queasiness."

One piece of the fallout is a reduction in property values, which he predicts will bring an argument for lower tax assessments.

"We believe the real hurricane, earthquake and tsunami will occur this spring when your tax assessment comes in the mail," Norton said, adding the notion that a taxpayer revolt is likely when the values are too high, based on the price of comparable sales and foreclosures.

On the sales front, Norton is predicting that some of the lowest interest rates in years may spark a resurgence of resale home-buying activity. He concedes that resellers are having to compete with individual and builder foreclosures with lower price offerings.

"In 2009, we will continue the downward spiral of resale home inventory and a slowing of personal foreclosure," he said.

He also predicted the footprint of North Georgia will change little during the next five years.

"The development engine that went wild creating new residential neighborhoods across the face of North Georgia has set the pattern for development and growth for the next 10 years," he said, adding that there currently are 148,000 vacant developed lots in metro Atlanta with 85,000 of them on the north side.

Norton said one of the bright spots of the housing market has been in the active adult, senior market. He pointed to The Villages of Deaton Creek in South Hall as the No. 1 selling subdivision for the past year and a half.

He said, however, that the devaluation of preretiree and retiree pension plans, 401(k) and Individual Retirement Accounts, would have an effect on the growth of the senior market.

Property on Lake Lanier remains a solid investment, Norton said, with home prices on the lake falling only 6.1 percent.

"Lake Lanier property is like money in the bank," he said, "only this time better."

Gainesville civic leader Gus Whalen was encouraged by Norton’s report.

"I think the realistic and optimistic forecast is achievable, and it’s up to us to make it happen," Whalen said.

Gainesville City Councilman Robert L. "Bob" Hamrick agreed.

"Obviously, we’re sort of at the bottom," Hamrick said. "But hopefully, we’re on the way back, and he had some real words of encouragement."