A Quaint Town in Georgia Struggles With the Real Estate Crisis

ghost towns of the great recessionI fell in love with a newly-built neighborhood called Vickery the first time I saw it in 2004. Located just north of Atlanta in Cumming, Georgia, Vickery's turn-of-the-century architecture and tree-lined sidewalks feels like a Norman Rockwell painting come to life. The narrow streets and village storefronts suggest an ideal version of the American dream, one that I embraced fully when I moved in. Not surprisingly, the neighborhood was voted one of the best in Atlanta in 2006.

To the residents' dismay, Hedgewood Builders, which was developing the town of Vickery from scratch, declared bankruptcy in 2008, and all construction came to an immediate halt. Hammers were dropped on the spot, construction supplies were left to the elements, and many homes sat unfinished for months on end. Slab foundations remain untouched to this day and the empty storefronts exude the desolation of a ghost town. Vickery's empty lots are dotted with tall green plumbing posts instead of pine trees and new homes. The neighborhood shopping area once boasted boutiques and gift shops within walking distance, but the stores are all empty now.

Homes priced in the $800,000's have plummeted to the low $600,000's and unscrupulous foreclosure purchases have prompted law suits and investigations. In the meantime, a homeowner's association special assessment of $750 dollars on top of the annual fees of $975 has left residents wondering if the real estate bust is going to get worse before it gets better.

It's discouraging for residents to see that 75% of the lots in Vickery are bank owned, especially since we will continue to carry the load of homeowner association fees for vacant lots until the neighborhood is completely built out.

There's a sense among residents that the neighborhood will not be able to sustain itself if the current housing market conditions persist. As it currently stands, there are 31 liens against homeowners who have not been able to pay their HOA fees. As a homeowner struggling to pay the rising HOA fees and property taxes, I worry that at some point it may become too expensive to stay.

Not everything in the community is failing, though. The neighborhood YMCA is still going strong, and provides a meeting place and plenty of activities. Four restaurants anchor the empty retail village, maintaining a decent flow of customers despite the town's problems. And two new homes have been completed recently.

Even so, the recovery in Vickery has been painfully slow, and home values aren't showing signs of returning to original purchase pricing anytime soon.

Other communities around Atlanta are also suffering. But it's little comfort to know that surrounding neighborhoods have suffered the same fate as Vickery. And although the thought of leaving is sometimes a temptation, there is no point in leaving Vickery's woes only to jump into another struggling development, which may be even more desolate.

Given the weak economy and the frightful outlook for the jobs market, it looks like vacant muddy lots and tattered silt fences will be a part of the Vickery lifestyle for some time. However, as far as ghost towns go, I still think Vickery is one of the best haunts this side of Atlanta, so for now I'm going to keep hoping for a storybook ending.

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thinkingmansplan

I am also a resident of VICKERY and must say that Fran Marty (who, by the way, is employed by the people that built Vickery and left it a financial mess) has conveniently left out a lot of the details:
1) When the builder went out of business, the HOA was left with funds "missing" and unaccounted for (by the builder) -- these were funds that homeowners had paid into the HOA over the years!
2) There is ample evidence of POOR CONSTRUCTION PRACTICES around this small community: roof leaks, forgotten architectural support, FIRE-PRONE chimney design!! (a house recently burned down due to the builders' not following code and building a chimney with more than a 30% interior surface angle - they're now being sued by the homeowners insurance co.)...and the list goes on and on.
3) Unpaid workers and laborers putting liens on homeowners' properties because they were not paid by the, now defunct, builder. These are people that are in a low income group - and for a rich builder to do this to them is sickening.
list goes on....etc...etc....etc....
The builder has conveniently filed for bankruptcy protection and is sitting pretty watching it all -- WHILE LIVING in the same neighborhood!!

Just an honest opinion - shared btw, by a majority of the homeowners here! (and none of us are affiliated with the builder!)

December 16 2010 at 4:15 PM Report abuse -1 rate up rate down Reply
1 reply to thinkingmansplan's comment
schizzna

Thinkmansplan-It is unfortunate that the housing market collapsed and your HOA suffered because of this. It is pretty tough to warranty existing homes when you are out of business or still in busniess and losing money. Also you have no idea how much money your so called poor workers and laborers made. None of them at the time would fall in to the low income group unless they were just lazy. All they needed was a skill,insurance and vehicle and it was up to the sub whether they want to make $600 week or $6000. Sure after the market collasped that all changed. If this was my neighborhood I would be talking it up not down. The quickest road to recovery is to finish the neighborhood.

March 04 2011 at 11:29 AM Report abuse rate up rate down Reply
Fran Marty

I am a resident and a local realtor who has served Vickery for almost 10 years. I see the Vickery story very differently. I completley understand your sense of feeling disillusioned for the last 2 years. The neighborhood of Vickery was the most sought after neighborhood in the north Atlanta area. There is a tall stack of accolades that include national, regional, and local awards for planning and design. The real estate market in this neighborhood was a story the Atlanta market has never experienced. The economy failed and the rest is history. Yes, Vickery has seen its darkest day, however I believe I see a better day ahead. As the old saying goes, "The cream is always the cream". I see a re birthing of housing markets at Vickery. Even in the worst of times when the neighborhood was suffering, the few houses that were on the market that were finished sold. There were about 3 houses left unfinished in Vickery. A foreclosure, not a bankruptcy occured. There were around three houses sold to a builder who resides in Vickery. Actually, one of those houses sold 1 hour after the builder purchased the house from the bank. The other 2 were under contract within 60 days of that time. There were also townhomes left unfinished. They were purchased by an investor group and all townhomes are finished and occupied by families. We also have condos that have been slower to recover. People have always walked through the door and wanted to reside in this neighborhood. Our neighborhood now is beginning to benefit from an investor group who purchased lots in here and are currently building homes that meet the current market. Yes, the fact is the prices are lower, however the architecture is a good blend with the already quaint architecture that exists. The fact is in life that we crawl before we walk before we run. I very much believe that in todays terrible market there is a market emerging that will continue to purchase homes in the neighborhood. We are funding the HOA with new purchases and rumor has it there will be NO SPECIAL ASSESSMENT IN 2011. Our ice cream shoppe just re-opened by a resident who joins me in his support of Vickery. Look, it is not perfect. As a resident in Vickery, a local realtor, and a passionate believer in new urbanism I see Vickery returning to the Atlanta market with a positive impact. Maybe not the market of 2006 because we live in a different world. Vickery is going to emerge and survive. Please stop by Chill Hill for an ice cream when you are in the area!!

December 13 2010 at 4:57 PM Report abuse +1 rate up rate down Reply
Wendy

Good for you! The lights are still on in rural Mason Country, Washington, too. We have been hammered by recent flooding, but the spirit of our citizens has never been stronger. As the regional newspaper struggles to maintain identity/readership, the name has been changed to completely exclude our County. However, we are alive and well. Best of Holiday Greetings to you.

December 13 2010 at 4:54 PM Report abuse +1 rate up rate down Reply
phdtogo

Ein Reich, Ein Volk, Ein Pelosi! Whoops, it's still the Weimar Republic sliding downhill towards the Reichstag Fire and takeover by the National Socialists (Nazis)

December 12 2010 at 11:39 PM Report abuse -3 rate up rate down Reply
Sam Das

Look...All the talks will not help here, so no talking only solutions. There are solutions even if it comes with a loss and that loss will be the best teacher. so find a solution and don't repeat the same mistake. Best..

December 12 2010 at 8:29 PM Report abuse rate up rate down Reply
marhee9

They talked about this at donsmithshow.com today. That is the best conservative site on the internet.

December 12 2010 at 8:11 PM Report abuse +1 rate up rate down Reply
1 reply to marhee9's comment
cnsrvtvj

They have great music too. I love the interviews.

December 12 2010 at 8:16 PM Report abuse rate up rate down Reply
Robert

Just like prices of stocks, bonds and most any other investment, the prices of real estate can go down too!

December 12 2010 at 4:51 PM Report abuse +1 rate up rate down Reply
ImportantFacts

Honey, your house isn't worth 600k and neither are those of your neighbors. I am a real estate pro and your house may be worth 40% of 2006/07/08 pricing = 320k today. Your purchase price was based on ammenities and on the overall integrity of the neighborhood. Besides a Y, sounds like you don't have much. I would estimate that the only buyer that you could find would be an investor. Investors are picking up vertical product for 30-50 cents on the dollar left and right. And your competition isn't just from sellers in ATL. This is a national competition when it comes to finding an investor buyer who will hold your property for many, many years if he is expects to ever make a dollar on his investment. In the meantime, he will rent it out. The very best thing that you folks out there that are under water to the tune of hundreds of thousands of dollars, is to hire a consumer debt attorney and force your bank to take a Deed in Lieu of Foreclosure. Unless you want to coninue to live a life of debt, stress and fooling yourselves, take action right now! Another HUGE wave of foreclosures is coming - both residential and commercial. And we "ain't seen nothin' yet." Be sure that your lawyer addresses the very likely chance that you will receive a 1099A or 1099C from your lender, as well and how you can avoid these taxes. (There are exemptions if you are financially insolvent, primary residence, etc.). I know what I am talking here. DO NOT continue on a sinking ship - it affects your mental health, your relationships and your physical health to continue this stress. The banks DO NOT CARE about you either way - your pride is all that is nstanding between you and freedom. Move into an owner financed MODEST home or a rental for a couple of years. Even if you have to file bankruptcy, it is far better of a life than what you are holding on to - being a slave to your creditors. And don't believe the BS that you won't be able to get financing for 7 or 10 years. it is 100% untrue. You can even get a goverment -backed mortgage 2 years after a Chapter 7 bankruptcy. I hope that those who my words are touching today heed my advice. Move on NOW - it will take a few months to get through it. But you will soon be on the road to living within your means and true happiness. God Bless You.

December 12 2010 at 4:06 PM Report abuse +3 rate up rate down Reply
5 replies to ImportantFacts's comment
goody1bo

Home prices are still a bubble compared to historic norm. According to case shiller index, we are still 20% above long term averages. Typical bottom comes at 20% below average. But this is not your typical recession. This is a deflationary crash. This is Great Depression material. These averages themselves are based on a money supply that was inflated by borrowing for many decades. When the money supply deflates, existing prices and salaries cannot be sustained: http://www.kondratieffwavecycle.com/housing-bubble-bust/ We are following the foot steps of Great Depression. Stock market just turned down at 61% retracement rally. Head and shoulders in place. 2000 is left shoulder, 2007 is the head, 2010 is the right shoulder. Stocks are a leading indicator. They can crash and not come back for decades. It has happened to past generations. Do not think we are immune. Today the debt problem is much much bigger than the days of Great Depression. Whatever you do, do not get into debt. If you want to buy, buy cash down. Even if prices do not fall, in many cases, rent is cheaper if you consider mortgage interest, property taxes, condo fees, maintenance, lost interest/investment income...

December 12 2010 at 1:37 PM Report abuse +2 rate up rate down Reply
1 reply to goody1bo's comment
Wendy

You make some good points. I do believe in fighting, which I have done all my life ... my legs are strong from "digging-in." This is a fight we can survive and win. And yes, it will get worse before it gets better. If you are already in debt, do not take on any new debt. Make that your mantra for 2011: no new debt. Pay off what you have, and stick by your guns. All our relatives are getting small gift certificates and home-made goodies this year. If our finances deteriorate, it will be hugs next year. Thank you, everyone, for your common-sense comments.

December 13 2010 at 5:04 PM Report abuse +1 rate up rate down Reply
marine1942

Hope and change

December 12 2010 at 12:03 PM Report abuse +2 rate up rate down Reply