Tips & Tricks: Finding the Next Up-and-Coming Neighborhood
Published | Written by Liz Kaye
You want to find a property that fits your needs to live, but also appreciates in value for an eventual sell. Who doesn't, right? Ideally, you'd look for a property in a neighborhood that will be of every buyer's desire in a couple of years. The biggest question still stands, however. What do you search for when on the lookout for these 'hot neighborhoods' in your area? There are several strategies you can use to scope out your future home sweet home to ensure you'll get more bang for your buck when it comes time to sell.
FIND YOUR CURRENT HOTSPOT
Real estate prices rise in current hotspots. As the area becomes increasingly popular, inventory doesn't reach demand or prices cease to remain reasonable and the area will likely expand out. This process is known as spillover and as more people move into surrounding areas, these neighborhoods will likely become popular as well. Looking first into these neighborhoods won't guarantee an up-and-coming area as the next hotspot, but it can provide the framework to start your home-buying search.
LOOK INTO NEIGHBORHOOD STATS
Factors such as a good education, crime rates and per capita income all play a role in neighborhood improvement. There are free and paid websites out there to help you hone in on this criteria. How you interpret these stats is also very important as you don't want to look for neighborhoods that already showcase these characteristics at a high level. Think of this data more as a breakdown of trends and market shift versus a catchall. Note also that the websites which require a small fee can expand this trend research and provide you with more information. If you consistently focus on rising rates in given areas, for instance, you can get into the neighborhood as the increase starts, but before prices skyrocket. This can really streamline the process and increase your home's value at a much quicker rate.
SALES DATA AND NEW CONSTRUCTION PROJECTS
Contact your local real estate agent! Not only will your agent have a better knowledge and understanding of the area, statistics and trends but he or she will also have access to tools that you as a buyer will not. MLS data allows realtors to search by cities or even subdivisions to obtain trend data such as days on the market, average sales price, average price per square foot etc. Additionally, your own naked eye is a great tool to spot neighborhoods as they experience growth. In an up-and-coming area, new construction will be very prevalent. Keeping an eye out too on flips and quickly renovated homes based on expected profit is also a key indicator of a rising neighborhood. This indicates that investors see potential in the area as well. Your key takeaway here is that turnover is important.
As people migrate to up-and-coming hot spots, business growth tends to follow and an even larger influx of people too. Grocery stores, clothing retailers, restaurants and gyms are amenities to keep an eye on. Should these businesses be large, corporate companies-- that is an even better sign for you. Large retailers are very versed and intentional when it comes to opening in new locations. This indicates they see potential in the area or have confidence in the trends they are analyzing to take a leap of faith and invest money. These corporations also bring in a lot of job openings. The people who fill those roles need somewhere to live and this likely causes a chain effect for the addition of more businesses to meet demand high demand.
Have you noticed any of these changes in your area? How do you look at market trends? We want to hear from YOU! Start a conversion with us in the comments below.
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