Staff Photo by: Brendan Sullivan Homes within the McGinnis Reserve are occupied while others are still being built. McGinnis Reserve continues to build and sell homes despite the economic downturn. McGinnis Reserve located in Suwanee has been around since August 2007 and has 170 lots in its Home South Community.
SUWANEE -- As a veteran real estate builder, Carl Riden likes to check out a property before he agrees to develop it.
At a cookout in 2007, Riden heard about the rare property that didn't even need a first look.
"Without even seeing it, I knew it was a great location," said Riden, who has worked in the industry since 1977.
Shortly after he learned of what's now known as McGinnis Reserve, Riden and his company, Redmont Homes, began work on 50 of the 170 lots in the development. Redmont and Home South Community, what replaced the out-of-business Bowen Family Homes, has less than 30 lots remaining to develop as they've done almost the entire buildout during the housing dropoff. Juan Tobon, a homeowner in the development, recently purchased a second home in the neighborhood as an investment.
"In general, they've kept the price very close to what we purchased," said Tobon, a business development manager with Intel. "I was not thinking (the appraisal) was going to be that good, to be honest. That helped us confirm that was the right place to invest."
Steve Palm, president of SmartNumbers, a Marietta-based company that tracks the local real estate market, said prices for this area are in line with expectations. After the development's average price jumped from $390,000 in 2007 to $440,000 in 2008, Palm said there has been a steady decline to $336,000 last year.
"That's probably why they're doing better," Palm said. "Good location, big home, good price."
To adjust to the dropoff, both builders made sacrifices. Riden said he refined his custom product. Areas like kitchens, hardwood floors and stone were all scaled back.
Michelle Hewell, a community sales manager with Home South, said the quality is still there with the Home South properties, but the margins are lower.
In the last 13 months, Palm said McGinnis Reserve is ranked 16th of most new construction starts out of more than 3,000 developments in metro Atlanta. It's third in Gwinnett County behind the Lakes at Sugarloaf in Duluth, and Barrington Estates in Suwanee and Sugar Hill.
While 2010 was the most difficult year for both builders, McGinnis Reserve was largely insulated since 2007 from the housing meltdown that ravaged the rest of the state and country. The development maintained its progress, builders and sellers have said, because of three overarching factors: the access to Interstate 85 and Peachtree Industrial Boulevard, being situated next to a park and fountain, and perhaps above all, the Suwanee ZIP code.
"It'd be hard to replace McGinnis Reserve," Riden said. "It's the general location of Suwanee. I'd like to say we were smart, but we weren't that smart. You come in there and see it right there next to a park. People are feeling good about it."
The neighborhood has bookends of the 85-acre Suwanee Creek Park and 300-acre George Pierce Park, which connects one end of the city to the other.
"You could go to those parks and the biggest road you'd have to cross is Martin Farm Road," said Josh Campbell, planning director for the city of Suwanee. "You could do that with your kids. That's a nice selling point that a lot of places don't have."
Hewell said the value of homes in the development has held since 2008. Hewell said one resident who bought in 2008 for $400,000 recently had his home appraised for $385,000.
"Location is optimum, but it's much better than Duluth or Lawrenceville," Hewell said. "Suwanee has a totally different character, a neighborhood feel. Most people know each other, it's close knit."
For the first time since 2005, home starts in Suwanee rose in 2011 from the previous year. The city reported that 59 homes were started last year, compared to 43 in 2010 and 32 in 2009. The 10-year high mark was 539 in 2005.
McGinnis Reserve represents a large slice of that growth as the subdivision had 26 of the 59 building permits applied for in Suwanee over the last 12 months. By comparison, the next closest subdivision for most building permits is Suwanee Station with 15.
Timing of the buildout of the subdivision was part of the development's success, Campbell said.
"They had literally just started when the bubble burst," Campbell said. "But they still had these nice assets to attact folks. Whereas in another neighborhood, they might have had some nice assets to attract folks, but the most attractive lots might have already sold if the neighborhood is farther along."
The occupancy rate in the subdivision has risen from 29 percent in 2008 to 72 percent last year.
"Last year was a big turnaround of the neighborhood as far as empty lots going away," said Hewell, who added that Home South sold six homes in December and five in January.
The Home South houses start in the $260,000 range for 2,500 to 3,900 square feet.
At the height of the housing bubble, Hewell said prices started at $329,000, and even touched $500,000.
David Ellis, the executive vice president of the Greater Atlanta Home Builders Association, said that price range ($250,000 to $275,000) has been the "sweet spot for sales" in the metro Atlanta area.
The other top-selling areas of the metro area include south Forsyth County, east Cobb County and north Fulton County, Ellis said.