On Monday, Sept. 29, 2008, members of the U.S. House of Representatives voted to not approve legislation for a bailout that would have allowed the federal government to purchase up to $700 billion in mortgage-backed securities following a period of recession, the closing of large financial groups and rising unemployment.

The vote raddled the stock market, which saw the Dow Jones Industrial Average drop 777 points in a single day. At the time, CNN reported the crash to have “knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever.”

Though not the start or cause of the Great Recession, the period of economic downturn with effects lasting roughly from 2007 to 2012, the crash was estimated to be the biggest one-day loss since the Great Depression and until earlier this year.

The recession was felt hard across the country and most of the world, and Forsyth County was no exception.

The beginning of a long recession

Long considered a rural community, Forsyth County saw unprecedented growth in the 1990s and the early-2000s. That growth meant a rapid rise in the residential real estate market, one of the areas hit hardest during the recession.

“It was a very frightening time,” said James McCoy, president and CEO of the Cumming-Forsyth County Chamber of Commerce. “Frightening in that you knew that something was happening very quickly, that this was clearly not the slow decline of the market. This was an earthquake, not a tectonic plate shift.”

Tim Hopkins, a real estate specialist with Keller Williams, said the average home price in 2007 was $290,000. By 2011, that average fell sharply to $220,000.

“I think for a while all of us thought we're going to be insulated from it just because things were so good for so long, you know, we kind of had a steady rise on things, as opposed to some markets that went crazy,” Hopkins said.  “But then all of a sudden, you know, the thing about real estate is you don’t know you’re going backwards until you already hit the bottom.”

Economic hardship meant many customers made distress sales, those that were either foreclosed or short sold, an agreement with the bank to sell the house for less than it’s worth instead of foreclosing.

“The total distress sales going back to 2007 was 3 percent,” he said. “In 2012, for all of Forsyth County, it was 43 percent.”

Since many homeowners couldn’t pay, that meant trouble for banks that had heavily invested in real estate loans.

Tim Perry, president and CEO of Citizens Bank of Georgia, said over 100 banks in Georgia closed, nearly a third of all chartered in the state.

As local banks closed and sold their assets, those properties came under the control of larger banks, which wanted to sell. Perry said he believes the lower prices offered by those banks made it harder for the county to recover.

“They were liquidating their foreclosed property at about 30 cents on the dollar,” Perry said. “It was having a detrimental impact on the value of our customers’ real estate, as well as any foreclosed property we might've had. It also caused it to deteriorate.”

Perry said most recessions are felt for a year or two before the economy turns around but the effects of the Great Recession was nearly a five-year cycle.

Georgia saw tougher times than most. The state’s unemployment rate peaked at 10.6 percent in 2010 compared to 9 percent for the rest of the country, according to the Bureau of Labor Statistics.

Forsyth County did better than most, but it still was impacted. The county’s unemployment rate was 3.6 percent in 2007 and 3.5 in 2017 but during that period saw rates of 5.6 percent in 2008, 8.6 percent in 2009 and 7.9 percent in 2010, with the rate decreasing each year after.

FORSYTH COUNTY UNEMPLOYMENT RATE BY YEAR

“I cannot think of a single organization, anything that operates that it did not have a direct and meaningful impact on,” Perry said. “Certainly, local government, churches, obviously homeowners, business owners of every variety. It just had a very profound impact upon the operations literally of everything.”

Perry said the lower employment rate didn’t just impact his customers, it impacted his customers’ customers.

“Our customers can only pay us – and I'm speaking from the banking industry as a whole – our bank customers can only pay us as long as they have jobs or their customers pay them,” Perry said. “This thing had permeated all the way through the fabric of the economy, especially the local economy.”

Just as businesses were affected, so too was the local school system.

Ann Crow, chairwoman of the Forsyth County Board of Education, said careful stewardship in the system helped local schools weather the “storm better than a lot of other districts,” praising administrators, employees and the school system for how they dealt with the recession.

“What we had to do was be very strategic about how we spent money,” Crow said. “As far as staffing goes, we weren't hiring any faculty. We had to cut back on the number of days students attended our schools. We really needed to expand the staff at the central office. We did not do that. We weren’t aggressive about trying to build new buildings.”

Though slowed, growth did not entirely stop during the recession, and about 1,500 new students were being added to the system each year. Since no new schools were being built, existing schools were packed with more students.

“That's when [South Forsyth and Lambert High schools] started creeping up to over 3,000 students, but we still had to wait through that financial crisis before we could relieve them,” Crow said.

The growth in the south is among the reasons Denmark High School opened before the proposed East Forsyth High School.

Recovery

For McCoy, the diversity of Forsyth County’s business community was among the reasons the county recovered quicker than other parts of the country.

“From a business standpoint, Forsyth County is extremely diverse. We’re not heavily weighted in one particular industry segment,” he said. “As a result of that, just like you would in your stock portfolio, everyone was hurting but outside of homebuilding itself we didn’t have one particular industry that was dragging us as a community down, and you didn’t see that across the country.”

McCoy said that while Forsyth fared better than most in terms of foreclosures per capita, the recession was not easy on the county.

“When you look across the state and really across metro Atlanta and certainly across the country, the number of foreclosures in Forsyth County was not nearly as high as other areas. But that’s a little bit like saying, ‘Oh, I accidentally cut just a little bit of my leg off,’” he said.

Another common reason given was local schools and their role in bringing people to Forsyth County.

“We saw homes being built here months if not years before they were in other communities,” McCoy said. “Our schools were a key driver behind that. People, even during a tough economic cycle, want their kids to go to the best schools they can possibly get them in.”

After dealing with the fallout of the recession, the school system hired Superintendent Jeff Bearden – after his predecessor, Buster Evans, took on a state role – began planning to build new schools, gave raises and increased staff.

“We felt that central office absolutely needed to increase staff with the size of our county, and so he did that, and we've added several people at the central office,” Crow said. “We were able, especially in teaching and learning, to instead of having one person over math and science, we have one over each academic area.”

Hopkins said by 2011, home sales, if at a lower price, were increasing.

“They would see something that some buyer had been waiting,” he said. “Now, they make an offer on something and they lose it to someone else, who also offered, then it increases that sense of urgency and that's when the market really started speeding up.”

Today, the average price for a home is now up to $340,000.

Once recovery started, it took off exponentially,

“There was a lot of pent-up demand for companies wanting to expand, wanting to buy more property, buy equipment, expand existing facilities, individuals that wanted to buy houses, but they needed to sell their own,” he said. “So when things turned with a favorable manner after early 2012, it really accelerated at a pretty fast pace.”

Lessons

Though the recession and recovery were difficult to go through, there were lessons learned after the experience.

“Right now anybody who was around then and is around now is hypersensitive to changes,” Hopkins said. “I've tracked this every quarter. So, after basically about roughly five years of the number of sales going up every quarter compared to previous year … the last few quarters, we’ve seen it go down.”

Hopkins said the price reductions weren’t drastic but were balancing between a buyers’ market, during the recession, and seller’s market after recovery.

“After five or six years it's going to correct,” he said. “So that's a big thing in Forsyth County. I would say is the price, you know, we're back at work to $340,000. And the last time it crashed we were at $290,000. So yeah, I would say there are signs of it at least getting to a balanced market, which is healthy.”

He said he isn’t predicting doom and gloom but would recommend homeowners planning to sell do so sooner rather than later.

Perry said while he doesn’t see growth reaching the level it had before the recession, he didn’t believe it would drop to recession-era levels either.

“I think banks, in general, are more equipped to handle a recession than we were maybe 10 years ago,” Perry said. “I think a lot of people falsely thought we were living in the land of milk and honey and that as long as we had real estate for collateral that wasn't going to go down in value.”

He said he felt the current amount of capital, underwriting criteria and practices and the experience of going through the recession would make a stronger banking industry statewide.

McCoy said he saw many locals who went through hardship during the recession went back to school, learned new skills or chased new businesses.

“Overall, the community is very affluent and well educated, which also means that economically it’s much more stable,” McCoy said. “When we experience an economic shockwave, people who have the financial resources and skills … even if they lost their job at Coca-Cola, they’re going to find an opportunity and have the safety net to be able to not lose their home and create other business opportunities for themselves.”

He said the Chamber was contacted nearly every day for two years during the recession about local residents asking for advice starting businesses.

“I think there were a lot of people who realized … that what they were chasing was elusive, that making money for the sake of making money is very elusive and empty,” McCoy said. “What I saw were a lot of people coming back to the core of why people get into business, and that, generally speaking, is to improve the lives of other people and each other and lift everybody up.”