New El Dorado discovered
in north Mobile County?
By Chip Drago
Mobile Bay Times
Is little Calvert in north Mobile County the new El Dorado and Highway 43 the pathway to a golden kingdom amid the piney woods?
Land prices, not to be confused with values, have predictably skyrocketed with the recent announcement of the $3.7 billion, 2,700 employee ThyssenKrupp steel plant near Calvert, until now just another run-of-the-mill, bump-in-the-road inhabited by 500 residents whose per capita income falls short of $8,000 a year.
The plant and its 29,000 construction-stage workers promise change and surrounding landowners holler giddy-up.
Land that was priced at $2,000-$3,000 an acre is now, in some cases, on the market at $18,000-$20,000 an acre, according to one commercial real estate executive. Proud sellers still scan the horizon for buyers though.
In fact, the disconnect between past and present, present and future is so other-worldly that appraisers are paralyzed. How can a 20-acre site worth about $70,000 just a few months ago be worth $390,000 today unless there has been some similar sale to justify the price? Until there is an actual, concrete closing, who's to say what the land is worth with confidence, not whim or wish? The property owners themselves are likely looking to a sale for guidance, all the while figuring it is easier to come down than go up on their price.
MBT asked a number of real estate professionals to assess the situation in north Mobile/south Washington counties. For competitive reasons as well as client confidentiality, the respondents for the most part will not be identified.
"It is a lot of hype right now. We are seeing apartment and motel people coming into the market in a big way. The commercial market is really dropping around the rest of the country and Mobile is on the radar screen for a lot of investors and developers who are looking for opportunities. The T-K deal has put us on the map. We are getting a lot of calls from all over the country from people who are looking for good commercial opportunities. Add the container terminal, and things should be good here for a while."
-- CTT, Mobile commercial realtor
"(About a month ago) there (were) some serious folks trying to obtain land not only around Saraland but also the Citronelle area. I understand Washington County had a bit of activity, but with the lack of good schools and shopping and being a dry county I don't think there will be as much going on. The overall home sales market in Baldwin and Mobile County is way off -- a disaster. That includes the Saraland and Satsuma area at this time. I hope this area will pick up when the jobs actually start being filled."
--FIJ, longtime commercial developer
"I was talking to someone last night, not related to industry, who said he could not even get a valid property appraisal because the values were changing so fast in (the) Highway 43 area in the north part of the county."
-- ATF, industrial rep
"The real estate market had started moving ahead prior to the announcement but the mill will help to jump things ahead.
I am not in the real estate business but have kept my ear to the ground for the movement and ... you are right in some of the property being over priced. But I think many of the land owners around the mill look at the value of their property as being worth as much as someone is willing to pay. They have put the prices on up there with the idea they can come down easier than they can go up on the price.
Here in Citronelle it is a little different. The prices of the property are still very reasonable. What we are seeing is a growing number of people moving in here from other states as well as Mobile. They have sort of figured out they can live here and enjoy the country lifestyle and still be less than 45 minutes from the mall. My neighbors moved here from California, in their words, "for a slower pace of life."
But as for the mill workers we haven't had very many moving in just yet.
They just awarded the contracts for the construction ... so it shouldn't be long before they start to arrive.
There are a number of houses that have gone on the market, as people hope to take advantage of the people wanting to move here. As I said before, the prices in Citronelle, for the most part, are normal rates for the area and well below those of Mobile. Most of the locals who have placed their houses on the market have additional property to build another home on, so they can remain in Citronelle. I am one of those. I own a 5,000 square foot Victorian style home that was built here in the late 1800's. Now that my wife and I are empty nesters we have decided to put it on the market. If we sell it, we will build again here in Citronelle.
There has been a lot of rental construction going on in the city. A number of duplex apartments have been built to house workers. One company that we have featured in our paper -- Therma Save -- is building a rental unit.
They build what they promote as being a hurricane-proof house. They are using their material to build an apartment complex.
On a different note from housing, someone must know something about the things that are just around the bend. There has been a growing interest in commercial property here in Citronelle.
A new shopping center has broken ground and I have gotten a tip of two others that are in the negotiation phase."
-- Willie Gray, publisher, Citronelle Call News
"Asking prices are insane along US 43 up to McIntosh. Nothing has closed at these stratospheric prices however.
There is a nice-sized tract at a good location that lists for six times its pre-TK announcement listing, he said.
"Remember now: I don't know that anything has closed, and you don't have value without comps (comparable sales) ..."
-- BPA, commercial realtor
"The land values are most definitely over-valued.
The race track started the frenzy along Hwy. 158 and fueled by RE Brokers from the dead Gulf Shores condo market looking for the next 'flippers' haven.
Land owners in that area are now confused as to value and are either not going to sell or putting crazy numbers on their property just as beach front property owners did some years ago. Don't get me wrong, this area will be a boom area and development will happen as property values will go up dramatically. I believe that land owners are more informed from the highly publicized experiences at the Gulf.
There are several factors that make this area of Saraland and Hwy. 43 hot:
- 1) A strong residential market;
- 2) Improved road system -- Hwy. 158 loop road from I-65 to I-10;
- 3) A commercial market that has been overlooked (except for the Super Walmart) due to a weak residential market which has now changed with the increased residential building over the last couple of years. It's now getting the attention of retailers wanting to expand in the Mobile SMSA.
- 4) The race track hype, of course, which may or may not happen.
- 5) ThyssenKrupp, of course, which will happen.
I would love to have some property in this area to develop. In fact, I started working on it two years ago based only on the new loop road system and the lack of commercial development in the area. Hopefully, I can find a viable site that I can afford.
Bottom line? This area is coming into its own and will be changing quickly over the next two or three years."
-- OPH, developer
"I worked with a 300-acre trailer park developer, but the prices got out of whack for him. He was quoted $10,000/acre plus a share of the profits; too steep for his liking. That deal did not work and I have not tried another."
-- SGW, developer
