When buying a home, many home buyers are looking for the next great neighborhood where you can find a great space at a good price. The financial goal would be to realize a solid gain in equity as the years pass and neighborhood improves.
But how do you know when a neighborhood is on an upward trajectory? Here are a few signs a neighborhood is on the rise. Who knows, maybe you’ll find the next North Park!
1. It’s near another hot neighborhood.
We are know that in real estate, it’s all about location. If you can’t afford the prices in the currently desirable metro area, then look at the neighboring communities. It’s likely the amenities you’ll find there will be creeping into the adjoining neighborhoods, and yours could be next. Think about how North Park has benefited from its adjacency to Hillcrest. Will City Heights benefit from its proximity to North Park and Normal Heights? Or will Sherman Heights benefit from its proximity to Golden Hill and East Village?
2. It’s easily accessible.
Excellent public transportation and freeway access generally mean young people and families will find it desirable. Easy access to commercial hubs means commutes to work will be shorter.
3. It’s attracting independent business and trendy shops.
A young demographic in a neighborhood generally attracts bars and restaurants that are chasing millennial dollars. Just follow the bearded hipster. Look for trendy stores and restaurants that you’ll find in the established neighborhoods: farm-to-table restaurants, independent coffee shops, wine bars and of course the San Diego staple: craft breweries. An increase in the number of hardware and home improvement stores means residents are spending money on home improvement, which means home values will likely rise.
4. It’s also attracting upscale chain stores.
These businesses spend a lot of money tracking demographics and conducting market research before they begin to move into an area. Let them do the groundwork for you. Stores catering to a higher income clientele, such as Target, Trader Joe’s, Whole Foods, and of course Starbucks are the ones to watch.
5. It’s an area where homes are selling faster and faster.
If you notice a lot of houses undergoing renovations or new home construction, and more For Sale signs, it’s time to ask your real estate agent the average time a home in that area spends on the market. As the number of days on the market falls, the housing market in the area will be heating up. If you can get in at the beginning of this trend, you’re more likely to get a great price on your new property.
6. It’s a community where crime rates are declining.
Rising crime is an obvious indication that a neighborhood is going south, so it makes sense that a declining crime rate is a sign of gentrification and growth. If you see an area where a city is starting to pour in money, it’s a good bet it thinks the place is worth the attention. Improving school scores and a property tax that’s staying stable are also signs to look for. Start tracking crime in neighborhoods using Crime Mapping a portal dedicated to helping law enforcement agencies provide the public with valuable information about crime activity by neighborhood.
Looking for a neighborhood on the rise is always taking a chance. The get in before the influx of yuppies and their toy dogs, you should be prepared to accept the current environment, which may be less than desirable. There’s no guarantee you’ll be getting in on the next most desirable place to live in your area. But by looking at the signs listed above — and having a great real estate agent who knows the area and can offer guidance — you could be getting a great place for a great price.