Nestled on the southern edge of Oxford city limits is a small, gold-trimmed sign mounted on gray brick, marking the entrance to The Plantations. Behind the sign are large and elaborate red-brick homes, many with white columns out front and wide, inviting windows. All have well-trimmed yards.
None of them is cheap.
Built mainly during the housing boom of the late 1990s and early 2000s, the 65 homes at The Plantations are valued between $300,000 to $400,000 apiece.
The subdivision was just one of many to crop up in Oxford in the early 2000s due to an influx of people and the easy accessibility of mortgage loans, a widespread phenomenon that caused a housing boom across the country. The energy of this housing boom fueled much of Oxford’s commercial development, turning it into the retail hub of Calhoun County, some experts say.
Things are different now.
Like most of the country, Oxford’s housing construction slowed to a crawl after 2008 when the housing market collapsed because too many people in other parts of the country defaulted on loans they couldn’t afford. That set off an economic recession that resulted in high unemployment and a lack of credit for housing and other development.
Even the developer of The Plantations, Don James, who runs a construction company that bears his name and has developed several other area subdivisions in the last 37 years, is struggling.
Due to economic conditions, James says, he can’t do anything with 45 acres he owns next to the city’s planned multi-million-dollar sports complex under construction across from the Oxford Exchange. He said he hopes to one day use the land for another housing development.
“But we have to put that on hold right now until the economy improves,” he said.
Without available credit, fewer homes have been built, fewer businesses have opened and Oxford’s growth has slowed. But the city’s future is not full of gloom. Oxford’s housing market is still better than most others in the county, say some banking and real estate experts, and some retail development is still popping up — signs to some experts that Oxford is on strong footing and that its previous rate of growth will, in a few years, return with a fury.
“Oh, I think so ... in two to three years,” Shad Williams, president and CEO of Cheaha Bank, said of Oxford’s recovery. “I think 2012 will be better than 2011 was.”
Cheaha Bank was founded in 2000 in Oxford.
“Cheaha Bank has branches in other parts of the county, too, but I would say Oxford is our flagship and where most of the activity is,” Williams said. “When we come out of this thing, I think Oxford will probably come out of it quicker than other parts of the state.”
Larry Jackson of Jackson Mortgage in Anniston agreed with Williams that Oxford’s best days are not gone for good.
“It’s always been a good market,” Jackson said. “It’s starting to come back. Even a couple of years ago, (Oxford) was always in better shape than the rest of the county was.”
Credit crunch
Williams said that during the housing boom of the early 2000s, it was not hard to find credit for home loans.
“Oh, gosh, yes. Back in the boom, you could get it with no assets, no job and no income,” Williams said. “And housing values were rising at that time so the appraisal process was much easier.”
The situation is completely different today, though, he said. Now, few banks want to lend money, even to people who can prove they have available assets.
“It’s like daylight to dark here,” he said. “Things were out of whack then, but things are too tight now.”
Jackson has also seen a major shift in the last few years in how mortgages are approved.
“The mortgage is properly scrutinized a lot more now than it was back then,” he said. “You’ve got to provide proof of income and put down a down payment. And if you are checking in on conventional financing, there are tight guidelines, but tight for a good reason. We don’t want us to get into the position we were in a couple of years ago.”
Housing credit
and retail
With available credit, more people can afford homes. And when more homes are built in an area, retail tends to follow soon after, said Nancy King Dennis, director of public relations for the Alabama Retail Association. Oxford was no exception in the past decade.
“Basically, retail follows rooftops,” she said. “One of the first things retailers look at when going into a market is how much housing is in an area.”
Dennis noted that once a large retailer enters an area, it can create a cascade effect and encourage other businesses to follow. From large hotels and popular restaurants to the massive, tax-revenue-generating shopping complex called the Oxford Exchange, the city has seen much retail development in recent years.
“But first there has got to be people there or plans on board where future housing development is going to be,” Dennis said.
Oxford’s latest retail development is called Oxford Commons. Announced earlier this year, the shopping center will be constructed by fall 2012 across from the Oxford Exchange and feature a Publix Super Market as well as other businesses and restaurants. The shopping center would likely never exist, however, were it not for the available homes in the area and the residents in them with sufficient spending money.
“With most retail development, it’s mostly about households,” said Eric Brewer, developer with White Reach Development, the Kentucky-based firm developing Oxford Commons.
Brewer said the combination of the highly traveled Interstate 20 and the amount of housing in Oxford made the city an ideal choice for a retail shopping complex.
“When you are developing, you need either immediate households in the area or a destination farther out where people will be coming to shop at,” he said.
Leonard Zumpano, professor of finance at the University of Alabama and the chair of real estate economics for the Alabama Association of Realtors, said real estate developers consider many factors before deciding to build homes in an area.
“They’ll look at the existing stock … look at vacancies,” Zumpano said. “Too many vacancies means you won’t want to put any more houses in.”
Residential building permits show Oxford was rife with housing construction in the early years of the last decade.
According to the city government’s Building Services Department, 90 residential homes were built in 2001, followed by a jump to 145 new homes in 2002. New home construction numbers dropped in 2003 to 82, but then continued a steady rise to 89 homes in 2004, 94 homes in 2005, 113 homes in 2006 and 116 homes in 2007. In contrast, Building Services Department numbers show new home construction dropped significantly after 2007, with 68 homes built in 2008. Ninety-five new homes were built in 2009, but ever since, new home construction has declined, with 73 homes built in 2010 and only 28 homes built between Jan.1 and Nov. 30 of this year. Only one residential permit was issued for the entire month of November.
But developers weren’t building homes and subdivisions hoping people would come to Oxford. U.S. Census Bureau data shows that people flocked to the city in droves in the past decade, making new housing a necessity.
“Developers look at housing population counts before building,” Zumpano said.
The 2010 census indicates that in the past decade, Oxford’s population increased to 21,348 people in 2010 from 14,592 people in 2000, making it easily the second-largest city in Calhoun County. In contrast, census data indicates the county’s largest city, Anniston, shrank to 23,106 people in 2010 from 24,276 in 2000.
The history
Everett King of ERA King Real Estate in Anniston can attest to the rapid growth in Oxford’s housing market in the late 1990s and early 2000s.
“Oxford had been doing good … when the housing boom started, that’s when you could see Oxford was the place to be,” King said.
It was city leaders’ strong leadership and clear vision that kept Oxford on track, stimulating growth in the housing and retail markets.
“They had a progressive approach — they run that city like a business,” he said.
King said Oxford’s investment in its school system over the years made the city more desirable for families, further encouraging housing development in the area.
Just last year, the city opened a new, state-of-the-art, $19 million Oxford High School next to the $6 million freshman academy it opened a few years earlier. And due to the city’s expansion, Oxford purchased DeArmanville School in 2005 from the county school system for $1.4 million, then pumped another $1.2 million into the facility for expansions. The city also pumped $1 million in renovations into the Coldwater School. In 2006, Oxford completed the $7.2 million C.E. Hanna School.
And to help further fund its educational system, the city passed a 1-cent sales tax in 2009 for its schools.
“At the end of the day, it’s about the schools,” King said. “If the schools are good, the people will be clamoring to live in the city limits.”
King noted that many of the families who moved into Oxford in the past decade, while not all rich, tended to be more in the middle- and upper-middle-class brackets.
“Everyone wants to live next to people with similar income and education,” he said. “Oxford pulled together that great demographic appeal.”
King said such developments would make any city more desirable for retail development.
“It’s all about picking a demographic that’s viable,” he said. “You don’t build a new box store in an environment that’s going in the wrong direction.”
Clyde Huckeba, president of the Home Builders Association of Greater Calhoun County and owner of Clyde Huckeba Construction, said for him, Oxford has been the place to build for years.
“That’s where I do 95 percent of my work,” he said.
Huckeba agreed with King that the city’s school system helped fuel the housing market.
“The amount of money the city puts into the school system … the community supports the schools,” Huckeba said. “People just want to live here.”
However, Interstate 20 helped attract more residents as well, he said.
“I sold a lot of houses to families where the husband worked in Atlanta or the wife worked in Birmingham,” Huckeba said.
And many of those who bought homes from him during the early part of the last decade had plenty of money to spend.
“There were a lot of professionals moving in … that was the clientele we were working with,” Huckeba said. “There were a lot of companies that were building, adding management. We were selling homes starting at between $230,000 and $240,000.”
Zumpano said housing developers look at income levels before building as well.
“They look at where property values are higher … look where the population is growing,” he said.
For James, the city’s focus on infrastructure helped spur housing development, and therefore, retail development.
“A lot changed when they opened the 88 exchange,” James said, referring to the exit that deposits traffic from I-20 onto Leon Smith Parkway and, to the north, Veterans Parkway into McClellan. “Naturally, if they hadn’t gotten that done, there wouldn’t have been an Oxford Exchange … and that area would still probably be pasture land.”
He said infrastructure such as utilities and sewer are also important when deciding where to develop residential real estate.
“Back in the mid-’90s up until now, the city has been pretty aggressive in putting up sewer capacity,” James said. “Sewer is very important, especially since septic tanks are getting so difficult to get approved by the Health Department.”
Now and the future
But while the early years of the last decade were kind to developers like James, the same cannot be said for the last few years. The housing bubble that fueled lots of growth in the market across the country finally burst in 2007, triggering an economic recession. The housing market nationwide collapsed, followed by persistently high unemployment. November experienced some improvement though, with national unemployment rates dropping to 8.6 percent, its lowest since March 2009. The latest state unemployment rates show Calhoun County’s rate is 8.7 percent.
Calhoun County’s housing market as a whole is still recovering.
“Oxford is down probably 75 percent from where it was in robust times,” James said.
However, though demand for housing is low now, Oxford’s market is still better than in the rest of the county, James said. He expects that trend to continue for years to come.
And with more housing will come more retail development.
King has a similar opinion about the current and future state of Oxford’s housing market.
“The city has done really well despite the economy,” he said, “and they’re still building.”
Star staff writer Patrick McCreless: 256-235-3561.
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