Category Archives: Alpharetta Real Estate

Alpharetta faces the fork in the road

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Today there will be a very important meeting of the Alpharetta Planning Commission. The commission will review the request by MetLife to convert their property on Haynes Bridge Road from an office complex to a high density Mixed Use Development.

This will be the third such mega development to have been brought before the planning commission in the last few years. The first two projects were Prospect Park on Old Milton Parkway (the enormous dirt pile which serves as the entrance to our fair city) and the Windward Mill project which was approved on Windward Parkway. Neither of those projects complied with Alpharetta’s long term land use plan and neither one has yet to be completed. In fact it is extremely unlikely that they will ever be developed as proposed given the drastic changes in the commercial real estate market in the past two years. But that won’t stop the city’s Community Development Department from foisting another of these projects on the unsuspecting citizens of Alpharetta.

I hope that as the City of Alpharetta considers approving the MetLife project they will take the time to read this article which was originally published in the Atlanta Journal when MetLife first came to Alpharetta:

Metropolitan Life Insurance Co. held a grand opening this week for its headquarters in Alpharetta. The 81-acre campus, at Ga. 400 and Haynes Bridge Road in the Georgia 400 Center, is expected to hold some 800 employees in about two years. MetLife will occupy four of six floors and lease the rest. MetLife’s business in metro Atlanta includes pensions, brokerage, group insurance, real estate investments, disability insurance, securities and corporate investments. The company moved its corporate headquarters from Perimeter Center because of the increasing traffic problems there. MetLife sold Perimeter Center last year for $336 million.

The key section of the article says,”The company moved its corporate headquarters from Perimeter Center because of the increasing traffic problems there. MetLife sold Perimeter Center last year for $336 million.”

So in 1998 MetLife came to Alpharetta because they had developed the Perimeter Center of Sandy Springs into a concrete jungle with disastrous traffic. Now they would like to do the same here. The Atlanta Regional Commission’s review of the proposed MetLife project shows that it will take road improvements that cost 10’s of millions of dollars just to accommodate the extra 12,000 cars a day at that intersection.

I fully expect this project to be approved because influential business interests support it and our community development department is determined to cram enough people into Alpharetta to justify a billion dollar expansion of MARTA into this city. But it is sad to see this happening in my adopted hometown.

As a community we have come to a fork in the road. We can choose growth that compliments our attractiveness as a quiet place to raise families or we can choose growth that turns us into the next Perimeter Center.

I hope we choose the path less traveled but I’m not optimistic. Wonder how long it will be before we read an article notifying us that MetLife has sold their gridlocked property on Haynes Bridge Road and moved to Forsyth County?

If you care about this decision please contact city hall today 678 297-6000.

Discussion of Mixed Use Developments

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One of the local blogs I frequently read is Bob Strader’s liveinalpharetta.com. Bob is also a real estate agent in this area and his blog is primarily a real estate blog. In a recent post Bob extolled the virtues of mixed use developments in North Fulton County.

The current mixed use fad happens to be one of the topics that really gets my attention so I posted a rather long comment on his blog. But I didn’t want to wear out my welcome and still have more to say so I brought the conversation back here to GA Jim.

You can read Bob’s post at the link above and below is the comment I left on his website:

“Couldn’t disagree with you more on this one Bob. Smart growth is a charade being pushed by developers because it quadruples the density of their speculative parcels thereby quadrupling their profits.

Mixed use with townhomes? That was the good old days. A few years ago Penn Hodge got a 13 story condo tower zoned on Windward Parkway. What’s an extra 12,000 car trips on one of the most congested intersections in town?

And keep in mind that if 24% of people want to live in mixed use developments that means 76% don’t. Vickery Creek and Prospect Park were supposed to be the wave of the future but they were both in trouble long before the economic collapse.

Alpharetta has been the jewel of North Fulton because it is perfect for young families raising children. You say that the demand for our schools will always be there but you overlook the impact of high density development on those schools. If you don’t believe me check the test scores for any elementary school with high density mixed use in the district.

You are right that in the future there will be mixed use developments for the 24% of people that want them. Young, single people and empty nesters will support mixed use in areas like Atlanta, Sandy Springs or Vinings that have already run off the young families.

But high density mixed use won’t succeed in North Fulton until the developers have driven out the families that live here now.”

To give you a little background, my neighborhood was faced with a mixed use zoning in our children’s school district a few years ago. In the course of that zoning battle I learned a lot.  

When I talked to politicians, developers and their circle of defenders I would ask a direct question like,”How can adding 12,000 car trips to a horribly congested intersection improve traffic?” The response was usually some silly talking point like “Mixed use developments reduce traffic” to which I would ask, “How?” and repeat the original question. At that point the other party would usually hem and haw and act as though I were an idiot for not understanding the conventional wisdom of the development community. But I’m no fan of “conventional wisdom” because I find it is rarely conventional or wise. In the end it was clear that nobody could satisfactorily answer the most basic questions.

Another thing I learned is that developers and land speculators spend a fortune promoting the concept of “livable” and “sustainable communities” in Atlanta. There are entire groups like the Livable Communities Coalition devoted to promoting the livable concept and governmental entities like the Atlanta Regional Commission accept their  sustainability as gospel. The thing that struck me as most odd was that sustainable always meant increasing the density of undeveloped land. Not once has the conventional wisdom been that a developer should build four acre parcels with a density so low that traffic would be nonexistent. Wonder why that is?

Some people may think my position is anti-mixed use development but that is not the case. I was glad to see the Vickery development in Forsyth County because it is mixed use with a very low density much like my neighborhood of Windward. And I had no problem with the Milton Park development on Northpoint Parkway. Milton Park is higher density but it is in an area that is  primarily retail.

What I oppose is the simplistic conventional wisdom that “sustainable” mixed use is some kind of panacea. If people wanted these “sustainable” communities so bad the market would demand them organically and developers wouldn’t have to create front groups to advocate for them.  I also don’t believe that high density mixed use is appropriate for suburban areas like Windward and I have yet to find a single piece of evidence that they can succeed in that environment.

Blogging

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Sorry for the lack of posts lately.

Technical issues have made it more difficult to post quick updates and the holidays have reduced the amount of time I have available for writing articles. If you follow me on Twitter, @jimgilvin, you can see some of the interesting items I find. The 140 character limit of Twitter relieves me of my inclination to spend a great deal of time expounding on the subjects. 

Here are some items you may want to check out:

Argument for reducing/eliminating Georgia’s income tax

Argument for not reducing/eliminating Georgia’s income tax

Tax comparison of North Fulton County and Forsyth County

I have to go write articles for my neighborhood newsletter now so I hope that will keep you busy for a while.

 If you are not satisfied that you are getting your money’s worth please send your complaints to : someonewhocares@idontgetpaidforthis.com

Are we in the eye of the real estate storm?

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In an earlier post I wrote about the foreclosure market grinding to a halt as the system becomes overloaded with distressed properties, http://bit.ly/9uD0nJ Today I saw a post on Twitter by @northatlnews pointing out a related article in today’s Atlanta Journal Constitution.

The article notes that the foreclosure rate in the north Alanta metro area during the first six months of 2010 is up 29% over the rate for 2009. That is not good. Even worse is the fact that despite a higher foreclosure rate there are even fewer of these homes selling now. According to the article the actual sales of foreclosed properties have declined by 47%. Foreclosures up 29% and sales of foreclosures down 47% is ominous. You should read the entire article here: http://bit.ly/blGNND

I get the distinct impression that the real estate market has made it half way through a terrible storm and now sits in the relative calm of the storm’s eye. The problem is that we won’t be out of the storm until we break on through to the other side. I hope I am wrong.

September real estate activity in North Fulton

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A quick review of the real estate data for North Fulton County shows that there are currently 2020 single family homes listed on the multiple listing service for this area. In the month of September 211 homes went under contract so there is about a nine and a half month supply of homes currently on the market. Roughly 25% of the homes that went under contract are distressed sales, bank owned foreclosures or short sales.

The foreclosure market will bottom out sooner or later. But which?

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The impact of distressed sales on residential real estate has been the biggest reason for property value declines over the past few years and it doesn’t look like we have reached the bottom yet.

A recent article in the New York Times explains, “About two million households in the country are in foreclosure, and millions more are on the verge.” Since only four million existing homes are expected to sell in all of 2010 we still have a huge problem.  In fact distressed sales were 34 percent of all existing home sales in August according to the National Association of Realtors .

The real estate market will eventually recover but it is hard to believe we have already hit the bottom of the market when more than a third of the homes for sale are selling at discounts and millions more are on the way. Real estate prices won’t rise appreciably until we cull through the excess inventory of distressed properties and that is why I find another recent development so problematic.

The entire foreclosure process in the United States seems to be grinding to a halt. Mortgage lenders and other institutions responsible for getting defaulted homes back on the market are completely overwhelmed.

JP Morgan Chase, Bank of America and GMAC are three of the largest mortgage lenders in the United States and they have all stopped foreclosure proceedings because of legal issues raised by their process of  dealing with loans in default. The legal issues raised by foreclosures have also led a major title insurance company to stop insuring foreclosed homes and that means borrowers will find it even harder to get mortgages on these properties. Without title insurance the potential buyer of a foreclosed property could be forced to pay cash and there aren’t many buyers out there with that kind of money right now. It has even gotten so bad that the governor of Connecticut has halted all foreclosures in the state. All of these problems are making it difficult for the market to correct itself and slow down the natural healing process.

Despite all of the ominous signs in the foreclosure market, every month you can still find an expert predicting that real estate prices have reached the bottom and sooner or later one of them will be right. Sooner or later the legal wrangling over foreclosures will stop and the homes will be sold. Sooner or later the market bottom will be reached and property values will once again rise. Sooner or later everything will be fine. The problem is that the sooner seems to keep getting later and later.

Hat tip to http://christopherfountain.com/ for bringing the New York Times article to my attention. You can read the entire piece here: http://www.nytimes.com/2010/10/03/business/economy/03foreclose.html?_r=1&hp