North Atlanta Real Estate Market Update

North Atlanta Real Estate Market Update

Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes

That Atlanta market peaked on July 2007 and bottomed in March of 2012. We have since made a complete "V" shaped recovery since March 2012. At this significant bottom, and retail real estate were trading at 1996 prices. Today we are at 2004 prices entering 2005 prices. YTD Atlanta real estate market is up 18.75%. If the last 12 month appreciation in Atlanta repeats itself in the next 12 months, homes in Atlanta will be trading at prices at the peak of the market before the crash in July of 2007.

I spend a lot of time studying demographic changes and Atlanta and Los Angeles are in a 15 year cycle. These two markets are very interesting to me becuase of this cycle. 2011 is 1996 and the demographics of 01/01/2014 of the north side of Atlanta will look much like the demographics of orange county, CA of 01/01/1999.

The north side of Atlanta is the new Orange County.

Irvine - Johns Creek
Alpharetta - Tustin
Milton - Coto de Caza
Suwanee - Foot Hill Ranch

In 1990, Irvine ethnic demographics looked like this:

white 68.8%, black 1.8%, Asian, 22.1%, hispanic 6.8% - 1990
white 61.1% black 1.4% Asian 29.8%, hispanic 7.4% - 2000

In 2010, Johns Creek's ethnic demographics looks like this:
white 63.45% black 8.8% Asian 23.36%, hispanic: 5%

In 2013, 30% of Johns Creek is now made up of Asian households

Johns Creek's Asian population grew from 13% to 23% within 3 years period of time.

All of Johns Creek High Schools are among the best of Georgia:
Northview, JC High, and Chattahoochee

All of Irvine High Schools are among the best of California:
Uni high, Northwood, Woodbridge, and Irvine High

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Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
12y

@James Park

I do assume that all your figures are again based on those sub-suburbs and not really on Atlanta?

I apologize, I'm not trying to attack you. I'm German and very straight forward and I'm not very good at being subtle ;-).

It's just that someone reading this in another state, they will think that your numbers pertain to Atlanta - and they do not. The northern far out suburbs are completely different from the Atlanta market. And they've also gone through different cycles. For example, Atlanta had a major slump in '99-'02, due to overbuilding for the Olympics. Even thought he Olympics were in '96, there were many condo projects on the books that came to fruition after '96.

Your area OTP is money and soccer moms and families. Whereas ITP has many different neighborhoods that each have their own values and cycles. Some have become hip and cool in the past few years (Midtown). Some have lost their hipness (Buckhead). You have a good number of revitalizations (Kirkwood, Cabbagetown, Reynoldstown, Edgewood, East Lake etc) and some that have stayed lower income neighbohoods. Many of the revitalized areas are singles or couples, straight or gay.

So, to be honest, it sort of bothers me, if you call your area 'Atlanta' , when it is really more suburbs of Atlanta suburbs. People from the suburbs tend to want to claim 'Atlanta' when it's convenient, but want to have nothing to do with us otherwise.

See this reply in the discussion

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  • Queens, NY · Member since 2016 · 17 posts · 6 votes
    10y

    @Yoochul C.

    Hi Yoochul,

    Are you currently investing in this market?

    I'm from NYC and have been looking into investing in Atlanta but wanted to get a better feel for the market.

  • Financial Advisor · Glendora, CA · Member since 2015 · 209 posts · 94 votes
    10y

    Yeah i'm in the process of buying my third property through @James Park.  I bought two in Buford and one in Suwanee closes in October.  North Atlanta and Sandy Springs area seems to be the good areas.  Also, you might look into the area where the new Braves stadium is going up.  

  • Flushing, NY · Member since 2016 · 10 posts · 1 vote
    10y

    @James Park Hey out of curiosity how do you research the demographic changes of different areas, is their a particular website?

  • Queens, NY · Member since 2016 · 17 posts · 6 votes
    10y

    Thank you for the info!

  • Investor · Atlanta, GA · Member since 2016 · 62 posts · 29 votes
    10y

    @James Park is the man! I work with him out here in Atlanta.

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y
    Originally posted by @Dinesh N.:

    hi James,

    How does the recent rezoning of elem and middle schools in Forsyth impact property values? Especially the ones in south forsyth?

    Also whats the current inventory in Forsyth county and how does it compare to recent years? Can you conment on rental rates and AGY % recently?

     @Dinesh N., I think you need to be more concerned with rezoning of high schools more than elementary and middle school. If your middle school rezoned from South Forsyth Middle (Which is currently the #1 ranked middle school in GA according to www.schooldigger.com) to Piney Grove Middle, it will have much less impact in property values. However if you were in South Forsyth High Cluster and got rezoned to Central Forsyth, your rental values and property value would drop. Regarding the inventory levels of Forsyth County, I uploaded an inventory chart in my previous post. 

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y
  • Engineer · Suwanee, GA · Member since 2013 · 127 posts · 47 votes
    10y

    Hi @James Park, and fellow new neighbor in Suwanee, 

     Im learning my way through the North Atlanta market getting very familiar with the North Gwinnett and South Forsyth areas.. Thanks for sharing this knowledge to us, it is very informative as a resident as well..  Are you seeing developers still building at a record high to keep up with demand, Or are you seeing it starting level off ? Thanks

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    9y

    Atlanta appreciation between January 2016 - August 2016 remains at 5.6%. Only four MSA cities outperformed Atlanta in terms of appreciation in 2016 which include Seattle, Portland, Denver, and Dallas. Currently Atlanta is just 2.7% below its last peak in July 2007.



    Notice that New York is the only city that is in the red in terms of appreciation from January 2016 - August 2016. The California cities are not doing too well either compared to the other major MSAs. San Francisco's 2016 appreciation is 1.6%, Los Angeles at 2.0%, and San Diego at 1.6%


    The highest risk areas of a bubble include these MSAs
    1. San Francisco (The largest bubble of them all)
    2. Boston
    3. Denver
    4. New York City
    5. Minneapolis
    6. Los Angeles / Orange County
    7. Miami
    8. Washington D.C.

    Medium Risk Cities
    9. San Diego
    10. Portland
    11. Dallas
    12 Seattle

    Lower Risk Cities
    13. Charlotte
    14. Atlanta
    15. Tampa
    16. Chicago

    Lowest Risk Cities
    17. Detroit
    18. Phoenix
    19. Las Vegas
    20. Cleveland
  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    9y

    Between 2012 - 2015, you can see that the appreciation between Los Angeles MSA and Atlanta MSA tracked very similar to one another. In 2016, the cities' appreciation data are starting to decouple from one another.

    Below is a short term forecast of the 10 year U.S. Treasury Bond Yields.

  • Investor · Atlanta, GA · Member since 2016 · 63 posts · 27 votes
    9y

    Great info.  Thanks. @James Park

  • Real Estate Agent · Atlanta, GA · Member since 2016 · 2 posts · 0 votes
    9y

    I'm an agent in Alpharetta, and I've been looking into the Cherokee Co. area for investing.  I've seen some stats that show large population growth north of Marietta up I-575, coupled with the new Northside Hospital and other developments.  Does anyone else see similar trends or think this is a good area for investments?  Also, any concerns about the market reaching a peak and this being the wrong time to buy rental properties in N. Atlanta?

  • Investor · Snellville, GA · Member since 2017 · 4 posts · 4 votes
    9y

    Any thoughts about the Gwinnett Snellville/Lilburn area? 

  • Investor · Alpharetta, GA · Member since 2015 · 242 posts · 185 votes
    9y

    @Abel Aberra -Between Snellville and Lilburn - my experience is to choose Lilburn. Home prices reflect schools in the area. Lilburn has always had better schools than Snellville, and home prices are much higher there as well. The homes I have in Snellville- are barely chugging along- not keeping up with area price appreciation. Lilburn definitely is better in this regard. The trade off: most of Lilburn is older and most homes have septic tanks.  I had one home in Lilburn that had septic. Not much different than sewer- but have to service every 5-10 years, and what not to flush, etc. Have to get a septic company to inspect if you buy there. If issues- can be expensive. Snellville- no septic that I am aware of (unless outlying areas I assume). A lot of "newer" style homes are mixed in, but the area is not great for appreciation, mostly for cash flow, of if you get a great deal and can flip.

  • Investor · Snellville, GA · Member since 2017 · 4 posts · 4 votes
    9y

    Hi Richard, 

    Thanks for the feedback. I live in the Snellville area, right by the Brookwood cluster. Our home has appreciated fairly nicely in the past six years we have owned it aprox 30% or so. However, I wonder based on the prior posts in this thread if this trend will continue/not. I understand it's a different story outside of the Brookwood cluster.

    Regarding the rental business I plan on starting this year, I'm wondering if I should focus on my area and other area's near by, or look at West End (belt line) and Hapeville (by the airport) etc.... ? I used to own a rental in Stockbridge/McDonough area and the "travel" to maintain it was a real challenge. Though it cash flowed really well.

    There are a lot of pro/cons to different areas, but I'm starting to do some research about the different markets around Atlanta and the suburbs. I'm in the beginning stages of the research and your input is very helpful!

    I'm looking to cashflow and not flip at the moment looking to build a property portfolio over time 2-5 years. Thanks for the quick response!!

  • Atlanta, GA · Member since 2015 · 2 posts · 0 votes
    9y

    Hi,

    Are there any updates on this market? I'm new to Lawrenceville and looking to buy my first property. I'm having a hard time finding multi-family properties in my area. 

    Do you think this market growth is going to be sustained? I'm wondering if it's a good time to buy my first property in such a hot market. Thanks

  • Contractor · GA · Member since 2016 · 268 posts · 54 votes
    9y

    @Matthew Norrod I would buy Multi-family now. There has been an increase in multi listings recently and the prices are moving up. 

  • Atlanta, GA · Member since 2015 · 2 posts · 0 votes
    9y

    @Juan Jackson Ok thanks. Yeah that was the plan all along. I would prefer a triplex, but all I'm seeing in my area right now are duplexes on sites like zillow.

  • Real Estate Broker · MI · Member since 2014 · 594 posts · 183 votes
    9y

    Hi, @Robert Culberson I'm assuming you have invested in Detroit city or the surrounding areas? 

  • Jersey City, NJ · Member since 2017 · 124 posts · 13 votes
    8y
    Originally posted by @Amit Bhavsar:

    @Rick Baggenstoss

    Rick thanks for pointing out James to me. Appreciate the details you have provided.

    @James Park

    Hello neighbor ! Went through your post and find the details very informative. Your research has definitely saved me a lot of time. I have been eyeing the Alpharetta, Roswell, Johns Creek, Cumming areas for some time now and cant agree with you more. Like many of naïve real estate investors, I have missed out on some of the deals in the recent prices as always had someone outbid me and the homes closed fast.

    You had mentioned on my post that South Forsyth, looks promising. Also with its lower property taxes it looks attractive there. Some of my friends who appraised their homes (residential not rentals) for refinancing have found that their appreciated significantly. While I find its a long commute from Atlanta for folks working, I

    Can you advise on which zip codes/neighborhoods in S. Forsyth would be good to focus on for rental markets.

    Thanks again for all the details provided.

    Amit

     Hi Amit, did you purchase property in N.Atlanta?

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    8y

    Experts think Amazon's HQ2 is most likely to land in Atlanta, Inc. says.

  • Jersey City, NJ · Member since 2017 · 124 posts · 13 votes
    8y
    Originally posted by @James Park:

    Experts think Amazon's HQ2 is most likely to land in Atlanta, Inc. says.

     Haha, we sure hope so James :-)

  • Real Estate Agent · Alpharetta, GA · Member since 2017 · 85 posts · 30 votes
    8y

    @James Park - As an investor, new resident to Alpharetta and new member on BP, I found this thread to be very informative and useful. Thank you!

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    8y


    Above are some data I put together for how we ended in 2017. Appreciation in the LA index was 5.5% and Atlanta is 5.4%. It is very interesting to see how the appreciation numbers look similar to one another from 2012 - 2017. Both LA and Atlanta got hit hard during the last down turn. The LA housing market dropped 41.9% from Sept 2006 to May 2009 and the Atlanta housing market dropped 39.5% from July 07 to March 2012. The Atlanta housing market is now in the clear green where home values are now moving higher than its previous peak value in July 2007.

    Take a look at Nashville, Tennessee. This market only dropped 9.1% from the peak of Jan 2008 to April 2011, but the Nashville housing market is up 35.4% above its last peak value.

    Why is it that Atlanta housing market cannot perform just like Nashville, TN in the years ahead? What is it that Nashville has that Atlanta doesn't?

    I see a trend here in inventory and continue to see appreciation take place in 2018 as the demand out strips the supply in the metro Atlanta housing market.

    My opinion is that the momentum is just starting to build in Atlanta.

    MSA Atlanta

    Date                        Inventory
    November 2017 :      25,061
    November 2016 :      29,343
    November 2015 :      31,853

    Appears that housing inventory is continuing to drop in the Metro Atlanta market in the last three years. The lowest inventory date was Jan 2013 with an inventory of 21,331.

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    8y

    The largest increase in housing costs would be in Raleigh, which wouldn't be able to build enough homes to sustain the influx of workers, according to the report. Meanwhile, housing costs would stay lower in places like Dallas, which has lax building restrictions and a cheaper labor pool.
    Apartment List said Raleigh, Pittsburgh and San Jose would experience the highest rent increases if HQ2 comes to town. The impact would be smaller in cities like Washington D.C., Los Angeles and Dallas.

    "Rents are already rising rapidly nationwide," Apartment List said in a report that analyzed data from the U.S. Census and Bureau of Labor Statistics. Half of renters are considered "cost burdened," spending 30 percent or more of their income on rent, according to the firm.

    New research from Apartment List, a site that catalogs apartment rentals across the country, forecasts an annual rent increase of up to 2% per year in the city that houses HQ2. That's on top of organic price increases that already occur from year to year.



    At the same time, the city that scores the second headquarters can expect housing prices, along with other costs of living, to increase.


    Home prices are set to soar in 2018.

    Take a look at the Dallas and Nashville chart. Nashville's housing prices are now 35% above the last peak while Atlanta is just getting back up to his last peak of July 2017. I sense that the Atlanta's housing market momentum is starting to build just like the LA/OC market between 1994 - 1999. There is no reason why Atlanta housing market can't be above 35% the last July 2007 peak like Nashville. Amazon's second headquarters in Atlanta will be a complete game changer.

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