Southern manners matter

Moderated by Rick Badie

Today, a veteran real estate executive offers a metro Atlanta housing and construction forecast that takes in to account the holiday season and other variables that may influence supply and demand in 2015. And just what kind of impact do you think Southern hospitality has on business recruitment and economic growth here and across the region? Well, plenty, writes a Chattanooga executive who specializes in mergers and acquisitions.

2015 housing inventory stays low

By Frank K. Norton Jr.

To everything there is a season, and time for every purpose. The Atlanta real estate market is no different.

The residential development and brokerage industry has been battling the cyclical nature of its business models for decades. Over time, market volatility has been tempered with better construction timetables, winter inventory reductions and brokerage firms’ internal sales and listing contests to sell off year-end inventory or build up inventory.

Thankfully, our metro Atlanta seasonal adjustments are rooted in psychological consumer patterns dominated by the noise of the holidays, not arctic winds and snowdrifts that impede construction. In some national markets, the construction season is only six or seven months long versus the metro Atlanta area, which tracks an average of 21 bad weather days from November to March.The quick forecast for the Atlanta real estate market (new construction and resales) is that the overall market will slow in December, January, February and early March. It will re-energize in the spring and ignite a storm of new construction and a summer of heavy migration and relocation to the area. National builders create huge supply-and-demand computer models to deliver housing inventory like “just-in-time” automobile manufacturers or widgets, but consumer consciousness — or holiday unconsciousness — overrules technology.

The “winter dip” is the time builders analyze the year’s sales results, product mixes and home buyer preferences and develop hot new floor plans. It’s a time for the home buyer to scan magazines and planning books to look forward to his or her own spring construction. It’s a time to explore vacant developed lots or acreage for potential construction or related initiatives.

Winter is “snakeless,” a perfect time to walk in the woods and dream of a new human nest. Winter — with the naked hardwoods and dead underbrush — is a terrific time to see a property’s terrain, landscape features and, of course, views. For generations, winter sales on Lake Lanier have soared because astute buyers can see all the best and all the warts of a property at the same time.

Some expectations for the 2015 real estate market:

• Overall home inventory will remain at historic lows in most metro Atlanta micro-markets. Expect 3.5 to 4.8 months of home supply throughout 2015. Low supply in our market is likely until the feds relax constraints on regional and small-town banking, which would allow speculative home construction to resume.

• National builders will continue to dominate the new-home sector because of their external sources of capital. We predict Atlanta’s top 10 builders will construct 50 percent of all new homes by the end of 2015.

• School zones drive the strongest markets. Hot demand for public education at the elementary school level is driving market inventory.

• Expect the 22-county region to permit slightly more than 20,000 new housing units, single-family and condominiums. That’s nowhere near our peak of 58,500 in 2006, but it is more than four times the annualized activity of our low year of 4,500 units in 2009. And as in the last five years, 52,000 to 55,000 homes will trade hands through the FMLS and MLS multiple-listing services in 2015. That’s normal activity, with average people with average credit buying average homes.

• Residential growth begets commercial retail development. Commercial retail development begets medical and service sector office growth. Medical and service growth begets new jobs and business industrial expansion. And jobs and business industrial expansion beget new residential units. In 2015, it starts again.

Frank K. Norton Jr. is CEO/chairman of the Norton Commercial and Acreage Group.

Southern manners matter

By Frank Williamson

Three of the top five merger and acquisition deals of the first part of 2014 in the Southeast happened in Georgia, totaling $5.6 billion in only one quarter. That deal volume doesn’t stop at the state line.

Georgia’s momentum is shared elsewhere in the region. According to a report in “Deal Drivers Americas,” more mergers and acquisitions were done in the South in the first half of the year than in any other region in North America. If this transaction velocity continues through the New Year, the South will have earned its place on the map as one of the most desirable areas in the country to do business.

Georgia has contributed significantly to the South’s economic growth. A recent CNN Money poll named Atlanta the sixth-best city in the country to start a business. The recent economic vitality there and across the South is also owed to something iconic to the region: Good manners.

Southern etiquette isn’t just white gloves and properly placed silverware. The notion that stopping to ask for directions could turn into an invitation to supper can also be found in Southern businesses. Respect and deference to others during negotiations, a commitment to roots and community, and a work-life balance philosophy are as much a part of professional attitudes as they are of socializing.

The rest of the country is starting to notice how these practices, along with entrepreneurship and resilience, have built businesses and industries that have made the South a region of thriving economic activity.

The South’s culture of civility isn’t something that can be separated from everyday life. It’s a part of Southern identity.So how do these traditions come into the boardroom? In the same way they would in someone’s home. Beverly Langford, management communications professor at Georgia State University, says professionals respond positively to a person who shows genuine workplace courtesy. GSU offers courses on professional etiquette, covering topics like manager-employee communication and interactions in co-working spaces.

In a world where civility is largely on the decline, a cultural appreciation for manners is a huge incentive for conducting business in a region. Little things like remembering names, congenial negotiation habits, eye contact and simple thank-you notes were all part of an Inc. article on business etiquette rules “that matter now.” For a Southerner, these practices are second nature.

Georgia is no exception to this regional trend. The state is known among entrepreneurs for tax rebates to attract businesses and a new streamlined process for getting a business license. The Georgia Department of Economic Development has started an “Entrepreneur-Friendly Initiative” to make support for entrepreneurship and small business a more deeply engrained part of the community.

Southern regional growth is attracting attention from around the country and the world. According to Commissioner Bill Hagerty of the Tennessee Department of Economic and Community Development, investors are increasingly interested in the region because valuation multiples are more reasonably valued in the South. Business-friendly tax environments also allow for capital invested in businesses to fuel future growth.

From B&Bs to boardrooms, etiquette, manners, Southern hospitality — however you refer to it — are inextricable pieces of Southern culture and invaluable guides for business practices. These important byproducts will ensure Southern businesses stand the test of time.

Frank Williamson is a managing partner of Chattanooga-based FourBridges Capital Advisors.

 


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