About 18 years ago I had the pleasure of attending The Norton Agency’s annual forecast event. It began with loud, high-energy dance music, then fog with colored lights bouncing across it. Amid all that, in walked Frank Norton Jr., an unassuming data-hound with a degree from Georgia Tech.
If you ever get the chance to talk to Frank, you quickly realize he’s not the kind of personality that comes with dance music and smoke machines. But the fanfare wasn’t really for him. It was for his information.
Over the years, Norton has earned a reputation as an E.F. Hutton of the real estate industry in Atlanta. In spring of 2007, before most people even realized there was a dark cloud looming, Norton cut $1 million of operating expenses. In 2014, when we were racing out of that storm and home values were recovering and the market was flooded with houses, Norton asked what people were going to do when housing inventory got near 0. The storm came and washed out many companies who waited too long to react. Now housing inventory is at historical lows for most price-points.
I had the pleasure of having Norton on my podcast, ATL Developments with Geoff Smith, and we talked about all kinds of things, including what it was like to grow up in a real estate family in Gainesville, Ga. It’s a great show packed with solid information. I encourage you to listen to it at https://businessradiox.com/podcast/north-fulton-studio/atl-developments-with-geoff-smith-frank-norton-jr/.
I’ll hit some of the high-points.
The Norton Agency operates mostly in what us Metro Atlanta folks would consider outside of the Rubicon. If you go anywhere north of Forsyth, Gwinnett or Cherokee counties, you will see their yellow signs. They have North Georgia covered. And if you want to know what’s going on there, he’ll tell you.
One of the biggest economic development engines driving growth in North Georgia right now are things called inland ports. For those of you who think all the buzz about the growth at the port of Savannah is something you can shrug your shoulders and say “well good for Savannah,” you are missing out. Savannah is one of the most important ports now on the entire eastern seaboard. And it is in the process of getting dredged, which will accommodate supertankers, possibly tripling its capacity.
As a result, these inland ports have cropped up around the more rural parts of Georgia. They are essentially rail stations with equipment to very quickly unload cargo from a tractor-trailer and put it onto a train car. Because of the increased capacity in both rail and at the port of Savannah, a chicken plant in Gainesville can put frozen chicken on a rail car at 6 p.m., and by 9 a.m. the next day it will be on a ship in the Savannah Harbor headed out to sea. The same goes for tractors and tractor parts. Because of that, manufacturing plants have been buying up land and building plants near all of these inland ports, creating thousands of jobs for those communities.
Norton said the geographical wedge between Ga. 400 and I-20 represents 47 percent of all new major job relocations and expansions in the state. Consequently, that is where most of the national homebuilders are developing large projects. Norton expects significant growth to continue all along I-85 and I-985.
Asked about his biggest concern for today’s real estate economy, Norton says it’s a lack of affordable housing.
“Houses under $250,000 are absent in the marketplace, and nobody wants to build them,” he said. “Land continues to go up in value…and regulatory costs are so high a builder isn’t going to build a house for under $250,000 because he’s not going to make any money”
Norton built 10 houses last year and broke down the costs. He found that 37 percent of the house cost was attributed to a government influence — impact fees, fire codes, delays, etc. He said local municipalities could help the situation by having a set of codes for lower-priced houses.
“I’m all for public safety, but I grew up in a room with one outlet on each of my four walls. Now I have to put one every 6 feet,” he said.
Norton sees a small correction nationwide in the real estate industry. He doesn’t call it a downturn, but just a minor correction that will be even less impactful in Metro Atlanta.
“We have very low inventory of houses, have not had overbuilding of houses, a strong job market, and a climate where people still want to retire here,” he said.
Geoff Smith is a mortgage banker with Assurance Financial focusing on residential home loans for refinances and home purchases.
*The views and opinions expressed in this column do not necessarily reflect the views of Assurance Financial Group