All Forum Posts by: James Park

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.

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

@Scott Trench,

Firstly I want to congratulate you on your first book "Set for Life". Someday I wish to become an author myself, once I gain more knowledge and wisdom.

I put together some numbers from case shiller and you can see that Denver, Dallas, Seattle, and Portland are all making new highs. Unlike Denver, Dallas has high property taxes and landlord insurance. You can see from the chart above that KC, Detroit, Cinnannati, and Atlanta are still among the best cities to low rental properties for landlords.  

@Ian S,

I mostly focus in the A and B Class assets in good school cluster and provide property management services in Forsyth County and North Gwinnett. Several of my clients are preparing for a 1031 exchange next year in order to defer depreciation recapture and capital gains tax. Let me know if you need me to guide you in the right direction.

Regards,

James

Question for the SEP and Solo 401K experts. 

Suppose a Solo Financial Advisor pays himself a W2 of $50k in 2016 and has a Net Profit of $60,000 for his SCorp in 2016.  What is the maximum amount the Solo FA can tax defer using both the SEP and Solo 401k?

1. Is the solo FA allowed to contribute to both the SEP and Solo 401k in the same year if the total deferred amount does not exceed $53,000?

2. 25% of  $50,000 W2 is $12,500 = Maximum contribution to SEP is $12,500 am i correct?

3. $18,000 is the max limit to solo 401k. I am not sure if Solo 401 allows 25% on the W2 income like the SEP or on the K1?

Option A: 25% off of K1

$60,000 * .25 = $15,000 + $18,000 max contribution = $33,000

Option B: 25% of W2 like the SEP

$50,000 * .25 = $12,500 + $18,000 max contribution = $30,500

What is the maximum amount the solo FA can defer if he is allowed to contribute to both SEP and Solo 401k in the same year?

A) $33,000 + $12,500 = $45,500 

or

B) $30,500 + $12,500 = $43,000

Thank you

Home prices in San Francisco dropped 46.1% from the last peak May 2006 to March 2009. Currently prices are at 3.4% above the last peak price of May 2006 but appreciation from January - August 2016 is 1.6%.

Home prices in Los Angeles dropped 41.9% from the last peak Sept 2006 to May 2009. Currently prices are at 8% below the last peak price of September 2006 but appreciation from January - August 2016 is 2.0%.

Home prices in San Diego dropped 42.3% from the last peak Nov 2005 to April 2009. Currently prices are at 9% below the last peak price of November 2005 but appreciation from January - August 2016 is the same as San Francisco at 1.6%

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.

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

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