Is South Dekalb County Worth Investing In? (Atlanta, Sandy Springs: foreclosures, power lines)

[equinox63]

I’ve been an Atlanta native for almost all my life, mostly in Dekalb County. But now that I’m older and starting a family (after reading posts on this site) I’m wondering if it’s wise to stay and invest in the community or move closer in-town like everyone else.

Here’s is my dilemma: I live in an inexpensive house near Covington Hwy, Redan Rd., and Panola Rd. between unincorporated Lithonia, Decatur, and Stone Mountain. My wife and I are considering doing major renovations to our older, well-kept house (including hardwoods throughout, completely remodeled bathrooms, etc.). But I’m sure that when we’re done, no one in our neighborhood will have our house’s interior features. However, there are many foreclosures and renters in our neighborhood also. And there are lots and lots of kids from young children riding around on bikes, to thuggish “looking” (yet usually harmless) middle and high school students playing basketball and walking from here to there in the street. There are also young adults who ride by periodically blaring bass-heavy music. There are some decent looking homes and yards and some unkempt homes with high grass. Ultimately, it’s a decent African-American community with homes mostly built in the ’70 and ’80 ranging from $90k to $160k.

Our dream would be to move closer to the city (like The city of Decatur, Avondale Estates, Kirkwood, East Atlanta, Grant Park, etc.). But we feel you get far less for your money, (other than location, a more diverse community, and status). We both teach in South Dekalb County so we are actually relatively close to our jobs, but we leisurely frequent the city often. So the question is, should we make a moderate investment to make our house as modern and stylish as our in-town counterparts and hope that the rest of the Covington/Panola area catches up in terms of value and economic development, or should we plan to save and move to those sought after in-town areas? Do you think we’d see a return on our investment considering your knowledge of the area? After all, we can have everything that a house in the city has for far less money except we’d be in an environment with thuggish “looking” adolescents, rather than the bittersweet economic disparity of the gentrifying in-town communities. What do you think? (Please excuse my long-windedness…)

[Iconographer]

Originally Posted by equinox63

But I’m sure that when we’re done, no one in our neighborhood will have our house’s interior features. However, there are many foreclosures and renters in our neighborhood also.

This is what I zeroed in on...if I were considering renovations to my house, I'd first look to see what kind of investment my neighbors were making in their houses and in the neighborhood.
The presence of higher than normal foreclosures and rentals would concern me as well...

[goozer]

There is always a risk investing in a downtrodden neighborhood. The hope is always that you buy a rundown house with "great bones" for a song, fix it up, and with the benefit of a gentrifying neighborhood, sell the place in 3-5 years and recoup three times your original investment (including rennovations). Unfortunately, for every success story, there are many others involving neighborhoods that don't turn around or housing fixer-uppers where you are scammed by a subcontractor or thieves rip out the copper pipes. Also, assuming the neighborhood does not turn around and the foreclosures are everywhere, you have to understand that there will be a very limited pool of buyers for your property.

If you have the money and a tolerance for risk, I suppose there is not much harm in investing in a downtrodden neighborhood. But I certainly would not invest your life savings in it.

[equinox63]

Thanks for the advice, LovinDecatur. The thing is that in my neighborhood, if we made these renovations I know that the interiors would trump the houses in my neighborhood. But in close-by communities, within two to three miles from my house, there are newer “McMansion” style neighborhoods. If I upgraded my house’s interiors, would it just be compared to homes in my specific subdivision or all the homes in the general area? My house was built with 1976 and is worth around 142K, but I assumed that with certain upgrades, it could contented with some of the newer homes in the area valued at the low 200K’s. However, although these homes are close, none of them are on my street, or directly in my subdivision. I just think about areas in-town where you see a shack right next to a brand new immaculate infill house. Does the shack hurt the house more than the house helps the shack or vise versa?

Also, I’m not sure how many rentals and foreclosures are “higher than normal”. How could one determine that?

Thanks for your input, Goozer. But I think I should clarify. We’re not thinking about buying the house. In fact, my mother bought the house in 1989 for 69K. I moved out in the late ‘90s, and then she moved out in the early 2000’s. She was going to rent it out, but I decided to return and take over the house after completing graduate school. I’ve been living in the house making progressive improvements for the past four years. I was recently married, so now we have two incomes and we refinanced for a lower interest rate and a 15-year (instead of a 30-year) mortgage. As a result, my 15-year mortgage payment is actually less that many people’s 30-year mortgage payments. Plus we’re planning for kids. Now the question is do we move up (in the same house), or move out (and spend more money). I’m very familiar with the area and I would not necessarily consider it downtrodden. That value (of my house) has doubled. (But it took twenty years!) It’s a regular middle-to-working class community. No drugs, homelessness, blatant crime, copper-wire thefts, or the like. The worse I’ve ever seen is shoes hanging from power lines, (until someone takes them down), graffiti on the cement or signs (before someone cleans it up), and kids walking around. And all of these occurrences are relatively rare.

I guess my basic question is: Is it possible to have a gentrified Kirkwood-style home in Lithonia? Will gentrification ever take place in South Dekalb County? We were looking to keep this house for at least 5 to 10 years or to at least come close to paying it off. We just would like to have the kind of house that we’d enjoy living in, even if it’s not on Ponce De Leon or Briarcliff. But we don’t want to lower the value of our house by doing so in this area. On the other hand, I’d hate to pay a bunch of money to move somewhere else only to realize years later, that property values in South Dekalb are skyrocketing and we could have been established in a virtually paid-for property in the area.

I remember when East Lake, East Atlanta, Grant Park, and Kirkwood were considered slums and some of the worst areas in Atlanta. Now, you’re nobody if you don’t live in these “hot new, gentrified areas”. Will that ever happen to us?

[Atlantasfinest]

Originally Posted by equinox63

Thanks for the advice, LovinDecatur. The thing is that in my neighborhood, if we made these renovations I know that the interiors would trump the houses in my neighborhood. But in close-by communities, within two to three miles from my house, there are newer “McMansion” style neighborhoods. If I upgraded my house’s interiors, would it just be compared to homes in my specific subdivision or all the homes in the general area? My house was built with 1976 and is worth around 142K, but I assumed that with certain upgrades, it could contented with some of the newer homes in the area valued at the low 200K’s. However, although these homes are close, none of them are on my street, or directly in my subdivision. I just think about areas in-town where you see a shack right next to a brand new immaculate infill house. Does the shack hurt the house more than the house helps the shack or vise versa?

Also, I’m not sure how many rentals and foreclosures are “higher than normal”. How could one determine that?

Thanks for your input, Goozer. But I think I should clarify. We’re not thinking about buying the house. In fact, my mother bought the house in 1989 for 69K. I moved out in the late ‘90s, and then she moved out in the early 2000’s. She was going to rent it out, but I decided to return and take over the house after completing graduate school. I’ve been living in the house making progressive improvements for the past four years. I was recently married, so now we have two incomes and we refinanced for a lower interest rate and a 15-year (instead of a 30-year) mortgage. As a result, my 15-year mortgage payment is actually less that many people’s 30-year mortgage payments. Plus we’re planning for kids. Now the question is do we move up (in the same house), or move out (and spend more money). I’m very familiar with the area and I would not necessarily consider it downtrodden. That value (of my house) has doubled. (But it took twenty years!) It’s a regular middle-to-working class community. No drugs, homelessness, blatant crime, copper-wire thefts, or the like. The worse I’ve ever seen is shoes hanging from power lines, (until someone takes them down), graffiti on the cement or signs (before someone cleans it up), and kids walking around. And all of these occurrences are relatively rare.

I guess my basic question is: Is it possible to have a gentrified Kirkwood-style home in Lithonia? Will gentrification ever take place in South Dekalb County? We were looking to keep this house for at least 5 to 10 years or to at least come close to paying it off. We just would like to have the kind of house that we’d enjoy living in, even if it’s not on Ponce De Leon or Briarcliff. But we don’t want to lower the value of our house by doing so in this area. On the other hand, I’d hate to pay a bunch of money to move somewhere else only to realize years later, that property values in South Dekalb are skyrocketing and we could have been established in a virtually paid-for property in the area.

I remember when East Lake, East Atlanta, Grant Park, and Kirkwood were considered slums and some of the worst areas in Atlanta. Now, you’re nobody if you don’t live in these “hot new, gentrified areas”. Will that ever happen to us?

I'm very familiar with your area and I just don't see the type of gentrification your looking for because it's not close enough to major business/entertainment or tourist destinations and South Dekalb doesn't have any to speak of itself. Also the area isn't very accessible
to transportation like MARTA Rail, major streets/avenues into town and arteries and highways intown (Like being able to access 20/75/85 within 5 minutes).

Also the intown areas like East Lake, East Atlanta, Grant Park, West End, Westview and Kirkwood have a certain charm and aura to them with the existing housing stock that ranges from late 1800's to 1930's and the tree lined streets and older retail areas (Non-Strip Mall Variety that is very prevalent in SWD) that is more appealing than homes & neighborhoods that were built in the burbs in subdivision in your area in the 70's.

You should look into the West End or Westview if your looking for good deals for gentrifying neighborhoods. There is a new charter school opening up in 2009 and is has a strong sense of community and a really nice housing stock. West End will appreciate at a much faster clip and has a better long range outlook IMO than St. Mountain(Not the Smokerise area and areas directly on/near the park_ or Lithonia...And you'll save tons of gas money . Good luck!

[IntownHomes247]

You really won't be able to expect a full return on your investment. You'll need to decide how much money you're willing to put into your home to make it the home you want to live in and consider that an investment in your enjoyment of the space while you're there, rather than an investment assuming a great return when you sell. You're in the throes of the same dilemma lots of people are facing right now -- do I want more house for the money or do I want a more popular location where I'll have to settle for a lot less. No one can answer that for you. But if part of the equation is whether or not you'll make a full return on your investment in your current house, the answer is almost certainly "no".

[j0ja]

I would do the minimal upgrades and sell if you prefer to live in town. South DeKalb is a convenient area and I do think parts of it may *rebound* due to its location, but when that may happen is so very hard to say.

[equinox63]

I see your points. But the thing is we wouldn’t be planning to move for at least 5 years. Our concern is whether the South Dekalb area is projected to get increasingly better or worse in that time. Additionally, my wife and I are both teachers who work in South Dekalb County. So it actually would be a longer commute if we lived in-town. We just like the culture, the amenities, and the quality of life of in-town living.

Think about areas “around” the City of Atlanta that are relatively pleasant places to live (in which property values and economic development are steadily increasing rather than faltering). Areas such as Marietta, Norcross, Roswell, Sandy Springs, Union City, and Fairburn. We’d be pleased if the quality of life in our area was at least on par with North Dekalb. I just feel like South Dekalb gets the shaft in many respects and I just don’t know if we hang in there, will it ever turn around in the foreseeable future. I was hoping that our closeness to the city would result a trickle out “revitalization effect”.

Ultimately, in a few years, I will either be teaching in the Atlanta Public School System or at a college or university, so that will likely be the catalyst that facilitates our moving in-town, but I’m scared that by then (in around 5 years) we’d be priced out of any area that would appeal to us. We’re also interested in Avondale Estates and the City of Decatur, but the prices seem to be rising exponentially. I know everyone is saying to "strike while the iron’s hot", but it would be nice if our property values were also (at least steadily) rising so we will be able to more comfortably make that transition monetarily in a few years by gaining somewhat from our current investment. I’m really not looking to do a quick flip, though.



Wishful thinking huh?

[IntownHomes247]

Originally Posted by equinox63

Wishful thinking huh?

Yes.

No one has a crystal ball so it's conceivable that South DeKalb will suddenly become the next new destination. But the odds seem to be against it. There are no cute little business districts (at least that I've ever heard of). There's precious little infrastructure to sustain the type of growth that other areas have experienced. I think I've heard that there is talk of a multi-use development in South DeKalb (as there are in North DeKalb and South Fulton), and that could certainly spur growth if you're in the vicinity. But whether that will pan out, who knows. . . . As it is now, South DeKalb just doesn't have the infrastucture to support the same kind of growth as those other communities.

However, we are in an EPIC buyer's market at the moment. Rather than put money into a house that you ultimately don't want to stay in and are afraid (and reasonably so) that you'll never get back the money you invest in it, why not take the plunge now if it's possible. You will not get a good price on your current house (no one is), but you'll probably get a great deal (relatively speaking) on the new place you buy. And if you choose your new location wisely, your new home should actually increase in value at a faster clip than your current one.

This is an EXTRAORDINARY time to "buy up." So if it's an economic possibility for you, it would probably be the better long term decision -- both in terms of the lifestyle you apparently want to have and the investment potential of the property.