Up-and-Coming Neighborhoods: Getting in While the Getting Is Good
What makes a neighborhood “up and coming?” The easy answer is: a formerly troubled, under-developed, or otherwise struggling neighborhood begins making noticeable signs of progress. In the real estate world, the term creates excitement. Picture a heavily populated city, competitive buyers vying for home—but they all want the same neighborhoods. This keeps prices high, maybe too high for most buyers, in those desirable areas. But suddenly, a formerly “undesirable” neighborhood is changing: new businesses are coming in. Streets look cleaner and safer. New trees and gardens pop up. A community emerges that attracts attention, and with that attention, buyers.
But it’s while the neighborhood is in transition that opportunity lies: for only then, while prices are still lower, perhaps among the lowest in this popular city, that buyers can get in, get a great deal, and be part of the rebirth of this neighborhood. And then, be the proud owners of a home worth much more than they paid.
Up and Coming Neighborhoods Past
I live in Portland, OR now, but I came here via San Francisco, where I lived, went to school, and worked, for more than a decade. When I first moved to San Francisco, the South Beach area was a ghost town. A mysterious ghost town at that, given parts of it back up on the bay- the same bay that North Beach hovers over, yet North Beach was a fully realized neighborhood, with prices to match. South Beach was mostly industry (a lot of it defunct), trash, and tumbleweeds. Now South Beach, home to AT &T Park, a totally revamped waterfront and boardwalk, posh condo buildings and connected to the city with new public transportation options, is one of SF’s ritziest neighborhoods. It's called the “New Nob Hill” not only for its stunning views, but for its now sky-high home prices. Mainly condos, and most of them relatively new (compared to the majority of SF’s old buildings and homes), the median sold price in this area in August of this year was over $900K, and that’s up over 16% from last August. Steep? Yes. But in a town like San Francisco, South Beach may still be “coming up” higher.
Up and Coming Neighborhoods Present
In May of this year, The Boston Globe took notice of the East Broadway district in South Boston, naming it one of the top spots to live in 2012. South Boston has in the past struggled with a fairly rough reputation, and property values there have been correspondingly depressed. But recent revitalization efforts, including plans to build large-scale industrial and office complexes such as the proposed Channel Center venture, are drawing more people into the area. Suddenly, buyers are taking note of the fact that East Broadway Street is only a little over 2 miles from downtown Boston, and that it’s growing into a destination in its own right. Meanwhile, in August of this year, the median price per square foot for single-family homes in South Boston was $317. In contrast, the median price per square foot for sold single-family homes in the long established Boston neighborhood of the North End/Back Bay was $625.
Buyers often feel the buzz well before the newspapers do though. ZipRealty agent Rhonda Hayden, who works in the Washington D.C. metro, says that “due to the flood of information available, today's buyers are educated on the housing market and very interested in purchasing homes in up and coming neighborhoods for two possible outcomes: As an investment, to turn it around in the future and make a profit, or to get in before the prices are out of reach.
How does Rhonda define “up and coming” for her clients? “I rely less on word of mouth and look for consistent stability and growth near popular areas with high walk scores, proximity to commuter routes or public transportation, low foreclosure and crime rates near target cities.”
Up and Coming Neighborhoods Future
Why would you want to buy in a neighborhood that’s still on the cusp of change? You may still have to put up with stuff you don’t love. There might not be all the services you want, the physical beauty you’re looking for. At least, not yet. But the advantage of an up and coming neighborhood is that there is still so much chance for change. Buyers who get in while the changing is taking place aren’t just adding equity to their investment; they actually get to have a hand in, an influence on the transformation. They can be a part of reshaping the community. That’s hard to do in well established neighborhoods, where things have been the same for a long time—and people pay high real estate prices to keep them that way.
Realtors Know Up and Coming Neighborhoods…Long Before They Up and Come
To find out about up and coming neighborhoods in the area you’re hoping to buy in, speak to a local Realtor®. Good real estate agents are in the field every day, driving the streets of their cities and towns. They know if new businesses, new construction, new projects are coming to an area, often long before the average person does. No one is better situated to give you the scoop on the latest hot neighborhood- long before it boils out of control.
Further Reading and Resources
- South Boston: Affordable, Up and Coming Neighborhood
- Search the MLS for homes in Boston, MA
- Search the MLS for homes in Washington, D.C.
- Search the MLS for homes in San Francisco, CA
Photo by Sanfranman59/Wikimedia Commons
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert