Johns Creek Homes and Real Estate

[eyephone]

I assume you have an LLC in Georgia?

 

[panda]

The annual fees for an LLC in Georgia is much cheaper than in California. The annual fee to form and maintain an LLC in Georgia is $50/year. I advise my wealthier clients to form an LLC and to have a $2 million dollar umbrella policy in addition to the LLCs for double protection.

I assume you have an LLC in Georgia?

 

[panda]

This is one of my local investor client's home we are closing on this Friday located Vickery Middle and West Forsyth School cluster.

Vickery Middle : rank 10 out of 483
West Forsyth High : rank 20 of 367

I have already secured a tenant for him who will be moving in on May 1st, 2014. $1700 rent, double security deposit of $3400. Corporate transfer from West LA. 2 year lease. Credit Score 800+, Income 130k.

One observation I have made is that a townhome in Irvine is a superior investment compared to a 3/2.5 SFR out in Ladera Ranch.

What I have observed is that:

A townhome close to Johns Creek (example Lambert cluster) appreciates faster, commands premium rent, and will sell quicker than a detached SFR 4/2.5 on a large lot 25 minutes north of Johns Creek (example West Forsyth cluster).

 

[freedomcm]

why is that?  people don't want to take on the maintenance?

 

[panda]

Freedomcm,

There are three metro cities from 2000 - 2010 where the population grew more than a million and Atlanta being one of them. There are many professionals moving down from the north and renting just to see if they like the area. Also, we have a shortage of inventory where the builders cannot keep with the demand in housing.

For example, the 1st phase prices for Bridleton just released last week and this community already has 500 people registered.

If you are a builder, you would make some serious coin here.

 

[usctrojancpa]

Freedomcm,

There are three metro cities from 2000 - 2010 where the population grew more than a million and Atlanta being one of them. There are many professionals moving down from the north and renting just to see if they like the area. Also, we have a shortage of inventory where the builders cannot keep with the demand in housing.

For example, the 1st phase prices for Bridleton just released last week and this community already has 500 people registered.

If you are a builder, you would make some serious coin here.

If that's the case and prices seem to be affordable then why aren't these people buying homes in a stable/rising housing market?  The cost to rent is higher than the cost to own over in Johns Creek.  If what you are saying is true, then the rentals can expect to have turnover as soon as their lease is up if the people intend to stay in the area.  That being said, it's great that you have been able to build yourself a real estate brokerage out there and that you can buy rentals that actually cash flow.  If I were closer I would consider buying a rental or two out there but I like to be within driving distance of my rentals and/or have family members who are local be able to manage the properties for me.

 

[panda]

Final walk thru for one of my high end investor clients tomorrow morning. Home appraised more than $25k from the time we went into contract in December. Located in the heart of Lambert High, the future #1 high school in the state of Georgia. If he holds this property for five years, he will clear $100k. My clients who have bought in this subdivision in end of 2012 / early 2013, have already cleared $100k appreciation.

Settles Bridge Elementary
Riverwatch Middle
Lambert High School

Johns Creek Georgia 04/24/2014 is Irvine California 04/24/1999.

 

[lnc]

Johns Creek Georgia 04/24/2014 is Irvine California 04/24/1999.

I don't want to curve your optimism but Johns Creek Georgia 04/24/2024 could be still Irvine California 04/24/1999.

Currently Irvine homes already trading above the housing bubble peak where 90% of U.S. homes will not reach that price level for a long while. I not familiar with J.C. Georgia and I don't know what drive their economy over there but what every drive the housing prices here at Irvine is beyond any economic fundamental reasoning and I don't think Johns Creek's housing market will be anything like Irvine's.

 

[panda]

Hi Inc,

Nice to meet you. Unfortunately it is almost midnight here, so i will continue my post tomorrow. Below you can see the macro level of Atlanta's real estate market.

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, population growth, I observe where Asian families are moving to, where the fortune 500 companies are moving to. I believe that Atlanta and Los Angeles are in a 15 year 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.

It is my belief that 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

 

[panda]

Inc, what pattern do you see here?

Alright time for bed for me as it is already midnight in the east coast time. I will write more tomorrow about my observations.

 

[irvinehomeowner]

Currently Irvine homes already trading above the housing bubble peak

Not according to paperboyNYC.

 

[lnc]

Inc, what pattern do you see here?

Alright time for bed for me as it is already midnight in the east coast time. I will write more tomorrow about my observations.

Hi Panda, I not disputing that the city of JC are like Irvine in it's early days but the housing market of JC will not be anything like Irvine's. 

In Irvine, we have a special breed of home sellers that are asking ridiculously high, WTF selling prices.  And we have a lot of them, the Irvine Pacific is one of them.  It's like a contest for them, see how high can it goes and who ever can ask higher selling prices wins.  And yet, the most amazing thing is that these WTF asking price houses are actually got sold.  There are buyers actually willing to pay ridiculously high prices for these houses and continued to encourage these sellers to ask WTF prices.  Unless you got tones of these type of seller and buyers in JC, the housing market of JC will not follow Irvine's path.

 

[usctrojancpa]

Inc, what pattern do you see here?

Alright time for bed for me as it is already midnight in the east coast time. I will write more tomorrow about my observations.

Hi Panda, I not disputing that the city of JC are like Irvine in it's early days but the housing market of JC will not be anything like Irvine's. 

In Irvine, we have a special breed of home sellers that are asking ridiculously high, WTF selling prices.  And we have a lot of them, the Irvine Pacific is one of them.  It's like a contest for them, see how high can it goes and who ever can ask higher selling prices wins.  And yet, the most amazing thing is that these WTF asking price houses are actually got sold.  There are buyers actually willing to pay ridiculously high prices for these houses and continued to encourage these sellers to ask WTF prices.  Unless you got tones of these type of seller and buyers in JC, the housing market of JC will not follow Irvine's path.

+1  The one thing that JC doesn't have is an Irvine Company that pushes the brand of Irvine.  It sounds like affordability in JC is fairly high as the cost or renting is higher than the cost of ownership so at least JC has fundamentals working for it.  That being said, you wouldn't pay me enough to live in the Southeast and deal with the heat & humidity in the summers and ice storms in the winter.  Although I hear they have some nice car tracks out there.  haha  >

 

[paperboyNC]

Currently Irvine homes already trading above the housing bubble peak

Not according to paperboyNYC.

You mean not according to closed MLS sales referenced by me

 

[irvinehomeowner]

Currently Irvine homes already trading above the housing bubble peak

Not according to paperboyNYC.

You mean not according to closed MLS sales referenced by me

Not exactly, the MLS didn't add inflation or lower interest rates as adjustment variables. Nor did the MLS spread the jump from end of 2012 to 2013 over a course of 8 years of inflation to justify it.

And... not *all* closed MLS sales supported your stance.

 

[panda]

Inc,

It is important that we are comparing to apples to apples. Not Irvine 2014 vs Johns Creek 2014, but Irvine demographics in 1999 vs. Johns Creek 2014.

Actually I am not a big fan of what Irvine has become in 2014, but I would have loved living in Irvine in my 30s, investing locally in the 90s.

Real Estate is a lot like the stock market in terms of valuation. If the PE ratio is high, the stock is over valued and If the PE ratio is low, the stock is attractively valued. Same concept applies to Irvine and Johns Creek.

If Irvine's median income is $95,000 and median home price is $762,000 the HI ratio is 8
If Johns Creek's median income is $110,648 and median home price is $310,000 the HI ratio is 2.8

I think you would agree with me that as the HI is lower, the quality of life is better.

Among wealthiest cities in America with more than 70,000 in population, there are two cities from Atlanta that made the top 11 list: Sandy Springs rank #10, Johns Creek rank #9. 7 of the cities are from California. Irvine did not make this list.

Rank  City                      State      Per Capita      Median household income

1        Newport Beach      CA        $ 86,586                  $123,958.
2        Newton                  MA        $56,285                    $104,493
3        Pleasanton            CA        $52,075                    $131,644
4        Arlington                VA        $59,098                    $101,171
5        Santa Monica          CA        $59,530                    $70,084
6        Mountain View        CA        $50,250                    $92,528
7        Thousand Oaks      CA        $47,338                    $99,800
8          San Francisco          CA      $47,420                    $73,789
9          Johns Creek          GA        $45,053                  $110,648
10        Sandy Springs        GA      $55,752                    $71,592
11        Sunnyvale            CA        $45,455                    $89,543

Among the 11 wealthiest cities in the United States, Johns Creek has the lowest HI ratio, which means that this city is the most undervalued.

Inc, what pattern do you see here?

Alright time for bed for me as it is already midnight in the east coast time. I will write more tomorrow about my observations.

Hi Panda, I not disputing that the city of JC are like Irvine in it's early days but the housing market of JC will not be anything like Irvine's. 

In Irvine, we have a special breed of home sellers that are asking ridiculously high, WTF selling prices.  And we have a lot of them, the Irvine Pacific is one of them.  It's like a contest for them, see how high can it goes and who ever can ask higher selling prices wins.  And yet, the most amazing thing is that these WTF asking price houses are actually got sold.  There are buyers actually willing to pay ridiculously high prices for these houses and continued to encourage these sellers to ask WTF prices.  Unless you got tones of these type of seller and buyers in JC, the housing market of JC will not follow Irvine's path.

 

[lnc]

Actually I am not a big fan of what Irvine has become in 2014, but I would have loved living in Irvine in my 30s, investing locally in the 90s.
I think you would agree with me that as the HI is lower, the quality of life is better.

I'm with you with this one.  This is a typical California's thing that home owner purchase home that are 5x HI but Irvine is just more extreme and yes, it makes life a little more challenge.

If Irvine's median income is $95,000 and median home price is $762,000 the HI ratio is 8
If Johns Creek's median income is $110,648 and median home price is $310,000 the HI ratio is 2.8

The interesting thing about Irvine is that there is a big discrepancy between medium income of entire Irvine household and medium income of home buyer.  Irvine consist about 45% Asian but 90% of home buyers are Asian.  The medium income for Irvine are around $85,000 but the home buyer's medium income are almost double that number, estimate around $150,000.  And the most impress thing about the home buyers in Irvine is that almost everyone bring at least 20% down payment to the table if they are not already pay full cash.  In most home buyer's case, the HI to home price ratio is about 5, not ideal but doable.

 

 

[paperboyNC]

Among the 11 wealthiest cities in the United States, Johns Creek has the lowest HI ratio, which means that this city is the most undervalued.

Prices are set by supply and demand. There is too much supply of land in the Johns Creek area for prices to ever sky rocket. Here in Irvine the ocean / camp pendleton / the mountains limit land. Heavy traffic on the freeways makes it undesirable to relocate too far away.

 

[paperboyNC]

The interesting thing about Irvine is that there is a big discrepancy between medium income of entire Irvine household and medium income of home buyer.  Irvine consist about 45% Asian but 90% of home buyers are Asian.  The medium income for Irvine are around $85,000 but the home buyer's medium income are almost double that number, estimate around $150,000.  And the most impress thing about the home buyers in Irvine is that almost everyone bring at least 20% down payment to the table if they are not already pay full cash.  In most home buyer's case, the HI to home price ratio is about 5, not ideal but doable.

A lot more matters than income as the number of cash buyers in real estate in general will tell you. Someone can inherit $2,000,000 and report a negative income last year due to investment losses.

 

[panda]

Give a million dollars to someone who does not possess the attitude of a millionaire and that person will most likely lose it. But take away all the wealth from a true millionaire and in no time he or she will build a new fortune. Why? Because those who earn their millionaire status develop the skills, knowledge, and experience to duplicate the process again and again. As you can see, when someone becomes a millionaire, the least important things is what they have. The most important thing is what they become.

The interesting thing about Irvine is that there is a big discrepancy between medium income of entire Irvine household and medium income of home buyer.  Irvine consist about 45% Asian but 90% of home buyers are Asian.  The medium income for Irvine are around $85,000 but the home buyer's medium income are almost double that number, estimate around $150,000.  And the most impress thing about the home buyers in Irvine is that almost everyone bring at least 20% down payment to the table if they are not already pay full cash.  In most home buyer's case, the HI to home price ratio is about 5, not ideal but doable.

A lot more matters than income as the number of cash buyers in real estate in general will tell you. Someone can inherit $2,000,000 and report a negative income last year due to investment losses.