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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  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    Atlanta ranks #7 among all other MSA cities with a population growth of 424,067 between 2010 - 2015. We can estimate by 2020, the population growth in Atlanta will be shy of 850,000.

    Rank

    #1   Houston             736,531
    #2   Dallas                  676,582
    #3   New York            614,895
    #4   Los Angeles       511,231
    #5   Washington DC 461,452
    #6   Miami                 447,696
    #7   Atlanta                424,067

  • Investor · Evans, GA · Member since 2015 · 190 posts · 103 votes
    10y

    Great updates, James.  The growth trajectory of the metro Atlanta area is quite astounding, and as I'm on business up there frequently I see it first hand.  Looks like we are getting quite a bit of growth down here in Columbia County near Augusta as well (28th ranked county according to the Forsyth County News article).

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    @Jade Spell, 

    Thank you for your kind words. Yes, I am very optimistic about the future of metro Atlanta and plan to concentrate my investment resources here.

    For any of you who needs any analysis done in your local market via inventory, zip code, county, etc in metro Atlanta, please let me know. I will be happy to present the analysis here on this thread.   

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    The D-Ratio is simply the inventory level 02-2016 / Inventory level 01-2010. The lower the D-Ratio, the higher the demand due to lack of supply, causing prices to move upwards.

    I have put a grade next to each county respective of their inventory shortage and demand. I believe Peachtree City, a very desirable suburban city in the south side of Atlanta is located in Fayette County. All of the top high school cluster are located in East Cobb, North Fulton, North Gwinnett, and South Forsyth.

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    Below are the D-Ratios by the city. The lower the D-Ratio, means that the inventory supply is scarce = greater demand = Greatest potential for appreciation. The Median and Average D-ratio is about a .51. I would say that any city with a D-ratio between .21 - .35 has a very a high potential in beating the average Case Shiller Index for Atlanta in terms of appreciation. 

    Cities in metro Atlanta that currently have the tightest inventory: North Decatur, Doraville, Peachtree City, Loganville, Woodstock, Mableton, Norcross, Peachtree Corners, Powder Springs, Kennesaw, Decatur, and Lawrenceville. Honorable mentions:  Austell, Snellville, Dunwoody, Smyrna, Marietta, Bethlehme, Roswell, Alpharetta, Druid Hills, Duluth, and Johns Creek. These are all cities with a D-ratio below a .35.

  • Investor · Suwanee, GA · Member since 2015 · 127 posts · 34 votes
    10y

    @James Park Thanks again for the update.  My focus is in N. Atlanta (Gwinnett primarily), so this if very good information for me. When you say the average is ~0.51, is that the national average or local?

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    @Maxwell Hunter

    Howdy neighbor, do you live in Forsyth part of Suwanee or the Gwinnett side.?

    As you can see that D-ratio in metro Atlanta ranges from 0.21 - 2.0. The lower the D-ratio the scarcer the inventory and vice versa.  Therefore the average D-ratio is .51 in metro Atlanta market.

    From simple concept of Econ 101, one can argument or predict that there is a greater chance for a higher that average appreciation in the areas with zip codes with the lowest D-ratio and vice versa.

    Hope this makes sense.

  • Investor · Suwanee, GA · Member since 2015 · 127 posts · 34 votes
    10y

    @James Park I live on the Gwinnett side of Suwanee.  I take it you are in Johns Creek right?

    Also, thanks for the clarification, that makes perfect sense.  I have a rental in Lawrenceville that has been appreciating well over the last few years and I'm hoping will continue.  From a population standpoint, it seems like the area is really picking up steam.

  • Real Estate Professional · Decatur, GA · Member since 2013 · 35 posts · 14 votes
    10y

    I have a duplex in North Decatur (ranked #1 on your list above) that I listed in marketplace last night.  It is zip code 30030, City of Decatur north of the square on Church St, 2 miles from Emory / CDC...

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    Tom, what does the inventory look like where you at?

    Are you experiencing a major shortage of inventory in north Decatur? What has been the appreciation in north Decatur in the last 12 months?

  • Flipper/Rehabber · Atlanta, GA · Member since 2009 · 352 posts · 25 votes
    10y

    Great info James thanks for sharing!

  • Anaheim, CA · Member since 2015 · 45 posts · 10 votes
    10y

    James,

    I like this post.  I am from Orange County and I find it interesting that you compared Atlanta to Orange County.  Are you originally from Orange County?  If so I was wondering what your take is on the current state of housing prices in Orange County.  I feel like right now in April of 2016 the home prices are back to the top of the market.  Housing prices are going for what they were back at the peak right before the crash.  Do you feel like there is another housing burst on the rise? I am asking because I am afraid to sell my one bedroom condo that I bought at the bottom of the market and then using that to buy a bigger place because I think the housing prices are way too high right now in Orange County.

  • Specialist · Manhattan, NY · Member since 2013 · 116 posts · 192 votes
    10y

    Great data thanks @James Park and @Rick Baggenstoss. Are the data as positive for GA in general? Im trying to understand why we get so much interest in GA assets. Thanks 

    Paul

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    @Alan Reza

    @Alan Reza,

     The southern California is much more cyclical than the Atlanta metro market. I do believe the median home price vs the median income ratio is stretched quite a bit in Orange County. I do see a short term 10-15% correction in the short term horizon (2017-2018) for the Orange County market, but nothing like down turn from 2006 - 2009. You can see the appreciation data for Orange County is very similar to that of the Atlanta market between 2012 - 2015. 

    To go from a 1800 sq/ft 3 bedroom "Detached Condo" without a drive way to an 3bedroom "SFR"
    with a driveway in Irvine is almost cracking the one million price point. I actually helped one family relocate from Orange County to Johns Creek last year and currently working with another new relocation family from Irvine. He senses that a correction is coming in his market and selling his 3 bedroom townhome in Irvine which he purchase in 2010 to exchange his property for a nicer 3500 sq/ft+ SFR in the Johns Creek area. Most importantly, it is a financial decision for him to relocate his family to the Atlanta market with lower cost of living.

    From the chart above you can also see a strong correlation between the LA/OC unemployment number and housing prices. The S&P just touched 2100 again last week. If we have a significant correction in the S&P breaking below 1600 (25% or more drop), I would think that correction in OC housing market will be directly impacted at a faster velocity.

    Hope this information helps.

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y
    @Paul Birkett,

    Just as the cities in Texas attract the largest amount of capital from California, New York is the #1 gateway city to Atlanta. New Yorkers like Atlanta due to the lower taxes, warmer climate, and pro-business environment.

    Originally posted by @Paul Birkett:

    Great data thanks @James Park and @Rick Baggenstoss. Are the data as positive for GA in general? Im trying to understand why we get so much interest in GA assets. Thanks 

    Paul

  • Specialist · Manhattan, NY · Member since 2013 · 116 posts · 192 votes
    10y

    excellent analysis @James Park  thank you. 

  • Flipper/Rehabber · Gainesville GA · Member since 2016 · 18 posts · 4 votes
    10y

    @James Park 

    I read through this thread and I believe you are right on with the #s. I lived in Irvine and attended University High aka UNI. I moved out Orange County in 2011 and now live in Dahlonega GA.

    I started out buying rentals and have been focused on flips in South Forsyth to Dahlonega since 2012.

    Have you considered looking at the market here again?  I closed on a new flip today and have 2 more in the pipe. You could say I am a bit nervous, especially after living through the Orange County CA price collapse.

    Cheers

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    Below are the most updated MSA data. As of April 2016, Atlanta is currently 5.2% below the July 2007 peak. 

    7 MSA are currently ahead of Atlanta in the following order.

    1. Denver           16.4%    above the previous peak
    2. Dallas             13.9%   above the previous peak
    3. Portland          6.5%    above the previous peak
    4. San Francisco 4.2%    above the previous peak 
    5. Seattle             2.5%    above the pevious peak
    6. Charlotte          2.3%   above the previous peak
    7. Boston             2.3%   above the previous peak

  • Realtor · Atlanta, GA · Member since 2015 · 266 posts · 182 votes
    10y

    Hey @James Park,

    Great analytics and you are spot on with the metro Atlanta trajectory for the coming years. There is inventory, but very tough to get the returns I am looking for and that's why I shifted my approach to Macon/Middle Georgia.

    With a SFH under my belt, I have shifted my approach towards finding a 4 - 12 unit MFH in south Atlanta with around a 6 - 9 cap. If you have data in Bibb county or the Southern Atlanta market that would be great.

    Don't get me wrong, I love my Gwinnett area, just not the returns from an investors point of view that "I'm" personally looking for. Maybe I'm not looking hard enough, so enlighten me if I'm wrong those of you who invest up in this area....

    Curtis

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    Looking at the Census numbers, 5 of the Georgia Counties made the list of the 100 fastest growing counties in the nation. The two counties that I know very well are Gwinnett and Forsyth. Forsyth County has now surpassed 200,000 in population with growing 36,927 between 2010 - 2015. Gwinnett County's population is now almost 900,000 with a population growth of 90,500 in the last five years. South Forsyth and North Gwinnett have been my favorite buy and hold markets in the last 5 years. Please note that not all counties in Georgia are growing in numbers and more than 50% of the growth areas concentrated in metro Atlanta. There are several counties in Georgia losing population. 

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y
  • Investor · Marietta, GA · Member since 2015 · 382 posts · 258 votes
    10y

    @James Park

    Thanks for the data. What are your thoughts on the city of Kennesaw?

  • Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
    10y

    @jonathan Gibson

    Below are the inventory chart and population growth for the Kennesaw. The inventory level seems to be at lower levels which is good. Inventory as of today for both attached and detached is 337. Just looking from a high level the real estate market in Kennesaw looks very healthy.

  • Investor · Cumming, GA · Member since 2016 · 1 post · 0 votes
    10y

    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?

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

    I just heard Atlanta hit a record high for medial prices recently.  Also, the only major MSA under $200k.  Great place to invest.

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