All Forum Posts by: James Park

Atlanta once again tops list as America’s No. 1 moving destination.

The top 10 destinations for American movers:

1. 1. Atlanta
2. 2. Tampa/Sarasota, Fla.
3. 3. Dallas/Fort Worth
4. 4. Phoenix
5. 5. Orlando, Fla.
6. 6. Seattle
7. 7. Denver
8. 8. Houston
9. 9. Chicago
10. 10. Las Vegas

http://www.bizjournals.com/atlanta/news/2015/02/04/atlanta-named-america-s-no-1-moving-destination.html

Forsyth County: 

Overall Rank : 36 of 3135 : Ranks 36th better counties to live among 3135.
Median Income: $87,585
College Education: 43.3%
Unemployment: 6.8%
Disability: 0.3%
Life expectancy: 80.9 years
Obesity: ... View more 28%

Current HI ratio 2.98

http://www.nytimes.com/2014/06/26/upshot/where-are...

Let's start from a high level which is the population growth by state. The chart below shows the largest populated states and its population changes from 2010 - 2014.. 

You can see that population has grown more than million in three states from 2010 - 2014: California, Texas, and Florida. The fourth largest head count growth goes to New York and the fifth largest head count growth goes to Georgia. Among the largest populated states, IL, OH, and MI are slowing.

1) Green -  A Exceptional Inflow migration. 
2) Yellow - B Strong Growth.
3) Orange - C Growing but Slowing.
4) Red - D - Slowing and population may decrease over time.

You can see that the fastest growing counties in the U.S are located in Georgia, Texas, Virginia, Florida. Forsyth County, GA is my home and where I invest : which is highlighted below. Forsyth County has strong growth and a low HI ratio. When I was researching demographics and population trends while living in Chicago 7-8 years ago, I knew that I needed to leave Chicago (developed city) for Atlanta (emerging city).

@Mike D'Arrigo,

"   They looked at it by region and are projecting the Midwest region to have the highest appreciation rate in the country."

I understand that the Midwest is a big place, but I am still not understanding why? Not trying to argumentative, but just trying to understand why you think the Midwest region will have the highest appreciation rate in the country in 2015.

The HI ratio maybe low in the Midwest, but it needs to be also backed up by the population growth, demographics changes, and job growth. The HI ratio being low in itself is not enough. The population growth trend in the Midwest is very slow compared to the south and the west and I believe this trend will continue into 2020.

I left Chicago for Atlanta in 2011 as I had no interest in building my real estate career or investment portfolio in Chicago. I lived in a 6-7-6 school zone in a solid C+ area in the northwest suburbs of Chicago and paid double the property taxes in my Chicago property compare to a 10-10-10 school zone in a solid A area in the northern suburbs of Atlanta. The purchase price of both homes were similar. I can personally testify that this move was one of the best lifestyle decisions I've ever made for myself and my family.

Hi Joey,

You want to research where the population have moved from 2000 to 2010 and where I they are continuing to move into 2020. The northwest and the Midwest is slowing with a growth of 3.2 and 3.9% respectively in the last decade. West has grown 13.8% while the south has grown the most at 14.3%. From a head count standpoint, the population in the south has grown almost double that of the west.

Some of the fastest growing states on percentage basis include: Utah, Texas, Nevada, North Carolina, Idaho, Georiga, Florida, and Arizona. You also want to research where the big companies (Fortune 500 headquarters) are moving to for lower cost of living, better weather, tax reduction, business friendly environment, and better life style. More and more families in the Midwest and the east coast will be looking for this as these locations  are the main gateways moving South. 

To answer your question about:

"What market will give me both positive cash flow and appreciation? And why?"

The school clusters, demographics data, and HI ratio is something I look at very closely. The HI ratio is the median home price / median household income. The lower that number is in an "A" class neighborhoods, the higher the chance of appreciation in that zip code. You also want to watch carefully what type of demographics are moving into the zip code. The HI ratio is the way I try to gauge the valuation of a zip code like I would when valuing company stocks. I see the population, demographics trends to continue into 2020.

Index Appreciation / Depreciation Data: Metro Atlanta and Los Angeles

In 2014 (Jan - Dec), Atlanta Metro home price index has risen 5.2% while LA metro home prices have risen 5.7. Notice how the appreciation numbers between LA and Atlanta are similar after the crash in 2012, 2013, and 2014. My belief is that what happened in the past is not indicative of the futue in both Atlanta and LA market. For example, the LA market can see negative numbers while we see positive numbers in Atlanta similar to that of 1991 - 1992.

In determining the valuation of a metro, I rely on the HI ratio which is:

HI ratio : median home price / median house income

The HI ratio in an "A" neighborhood in Orange County is more than double that of an "A" neighborhood in North Atlanta metro.

Conclusion: I believe that past performance will not dictate the future. I also see that real estate markets will start to decouple in the years ahead. Short term, I see deflation, and Long term I see inflation.

Emerging City:                          Developed City:

THE TOP 10 PUBLIC HIGH SCHOOLS IN GEORGIA

Among the best high school clusters in the GA (Class "A" Neighborhoods), real estate prices in these school zones have beat the Atlanta metro index appreciation of 5.2% by more than 3% in 2014. The median income demographics of North Fulton and South Forsyth is $100K+.

Johns Creek City Limits: Northview HS ( rank 3) & Johns Creek HS ( rank 4).
South Forsyth: Lambert High School (rank 9)
East Cobb: Walton HS. (rank 7)
North Gwinnett: Buford HS (rank 8) & North Gwinnett HS (rank 10)