Scattered throughout Newton County one finds partially completed sub-divisions, paved roads leading to nowhere and "For Sale" sign after "For Sale" sign. They are the survivors of a housing blitz that swept the county off its feet.
Now the housing craze appears to have run its course. Five months into 2008, only 64 new homes have been permitted in Newton County, according
to the county's Planning and Development Department.
Housing industry business is down 85 percent from this time a year ago when 812 new homes were permitted. Newton County Home Builders Association President Bob Goucher says he expects only 300 new homes to be permitted this year.
"We're losing suppliers and subcontractors, builders, developers," said Goucher, who also owns Bomar Inc., a building contractor company. "These losses are having an affect on the entire economy."
At the apex of the building frenzy in 2003, there were 1,969 new homes permitted in unincorporated Newton County alone, making the county one of the fastest growing counties in the United States, according to the U.S. Census Bureau.
Newton County is hardly alone in the housing downturn. Surrounding counties, such as Rockdale County, have also experienced a precipitous decline in permitted new homes.
According to the Rockdale Public Services and Engineering office, only 49 new homes have been permitted in the county this year, down from 448 new homes last year.
In Walton County, it's much the same. According to the county's Planning and Development Department, only 74 new homes have been permitted so far this year, down from 578 homes in 2007.
Andrea Hammond, executive officer for Newton County Home Builders Association, said the association has lost members, both as a result of the downturn and new state builder license requirements, which will go into effect in July.
"We've lost members. We knew that was going to happen," said Hammond, who said the NCHBA is still "very strong."
Hammond estimated that NCHBA presently stands at close to 300 members, down from 375 members two and a half years ago. Hammond said builders with financial reserves or the means to get backing some other way will likely remain in the business. However, banks are now less likely to issue loans to builders for the construction of new spec houses - houses built without an order on the books.
"They don't need to be building more spec houses right now; there's way too many sitting on the ground," Hammond said.
David Voyel, senior vice president for Pinnacle Bank, which serves Northeast Georgia and has worked with a number of builders and contractors in Newton County, said, "Obviously the housing market has affected all banks in many different areas.
"Just like other banks, we're faced with dealing with issues and making tough decisions," Voyel said adding that Pinnacle was not presently issuing loans anymore for spec houses. "We've really cut back on a lot of areas."
Statewide 218,000 jobs have been lost in the construction industry since last year, according to an assessment by the National Association of Home Builders. NAHB estimates that the loss of those jobs resulted in $8.85 billion lost in wages and salaries and $1.1 billion in corporate profits.
The state and local governments are also feeling the effects of the housing downturn. NAHB estimates a $1.71 billion loss in tax revenue for Georgia.
The recent housing downturn has had a ripple effect not only on Newton County's housing industry but also on the many other businesses that rely on it.
"A builder hires a landscaper, a plumber, a carpenter trim guy, a tile guy," Hammond said. "There are so many other people that rely on [the housing industry] for their livelihoods."
According to the Georgia Department of Labor, last year 7.8 percent of Newton County's workforce was employed in the construction industry, a sizable number.
When the other business sectors that rely on housing are also factored in, such as wholesale trade (2.8 percent of the workforce), finance and insurance (2 percent) and real estate, rental and leasing (1.5 percent), the downturn's effects on the local economy only multiply.
In the last few months, three lumber and hardware businesses in Newton County have shuttered their doors as a result of the housing downturn. Earlier this year 84 Lumber Company closed its Covington store on U.S. Highway 278 and PlyMart closed its City Pond Road location.
Last Saturday, Spillers Trustworthy Hardware and Building Supply, a 15-year-old family business located on Washington Street, closed its doors. Owner A.J. Spillers said the decision was made to close after business sharply decreased last year.
"Up until last year, we were doing OK," Spillers said. "Last year just went downhill and [we] just weren't able to recover from it."
Gerri Murphy, broker/owner of Coldwell Banker Gerri Murphy Realty in Covington, said the real estate business has been slow of late. Many new house closings have been foreclosures she said.
"I think when we get [the foreclosure] supply down some things are going to start going back," Murphy said. "There are a lot of foreclosures on the market. We need to get rid of those."
For investors Murphy said now is the best time to purchase a house.
"We are, I think, on the way back up," Murphy said. "Some [real estate agents] say this is the worst they ever remember it being."
Murphy added she was optimistic about the real estate market's prospects for the latter part of 2008 and 2009.
Goucher is also optimistic and feels the Atlanta area, including Newton County, will continue to grow.
"We have a relatively healthy job market; we're certainly better off than most other metro areas," Goucher said.
Goucher predicted that once the current excess of housing availability is gone from the market, the housing industry will return in full stride.
"With the lessening of competition with all of the sub-contractors and suppliers going out of business, there's just a tremendous reduction in competition," Goucher said, adding the price of new homes will likely not go down because the price to build has not gone down.
He estimated there is currently a six-month supply of new homes in the county by 2006 selling rates, which equates to approximately 750 unoccupied homes.
"Now's a great time to buy, once this local glut gets over with," Goucher said. "It is never going to be less expensive. We're continuing to get more and more code requirements that are costing us more."