You know that buying a house is all about location, but if you can't afford the best neighborhoods, you need to look for "up and coming neighborhoods" that are still affordable but have upward mobility in the real estate market. How can you tell a developing neighborhood from a stagnant one? Here are some things to look for:
1. Updates and renovations.
Developing neighborhoods will slowly get a facelift. There may be some homes that have worn exteriors and old roofs and landscaping, but many homes will be the process of improvement. There could a few renovated or updated homes on the street. As more and more homes follow suit, the entire neighborhood is worth more.
2. Historic charm.
There are some neighborhoods that have plenty of history but have fallen into disrepair. The older, once grand homes, are now divided, peeling, or even abandoned. However, up and coming neighborhoods are popular with younger buyers who are looking for unique and beautiful places. Original wood floors, cool architecture, old elevators, and even character windows are becoming more and more popular. It's more likely to see a historic district bounce back than a neighborhood full of budget ranch bungalows.
3. New businesses.
You can also tell a neighborhood is improving by the amount of new businesses in the neighborhood. For example, a stagnant neighborhood will not support small businesses like boutique coffee hops or mom and pop diners. These businesses will struggle to get enough patrons. Look for businesses that have opened in the past few years. Specialty shops, hair salons, bookstores, restaurants, and other small businesses help to bring more buyers to an area.
4. Decreasing days on the market.
When you look at purchase history in a neighborhood, you will see how long a house sat on the market before it sold. In an area that is becoming increasingly popular with buyers, the days that homes sit on the market will generally tend to be fewer and fewer. Two months ago, homes may have sat for 12 days. If they are only now sitting for 10, that's a good sign.
Up and coming neighborhoods become desirable because they "second choice" places to neighborhoods that are already popular. This means they may not be as close to places like downtown, museums, or nightlife, but they are "almost" as close. There might be public transportation, access to city parks or bike trails, or bussing for schools.
Contact a real estate consultant for more information.