Up-and-Coming Neighborhoods: Getting in While the Getting Is Good, Part 2
We've talked now about up-and-coming neighborhoods: their past, their present, and their future. Our essential lesson: such neighborhoods, if you can identify them before they "up and come," represent excellent opportunities, not only for buyers who can get a great price for a home that quickly appreciates in value, but also for sellers, who can suddenly sell more easily, more quickly, and perhaps more profitably than ever before.
Today we look closely at how the term up-and-coming functions in real estate, as well as make some predictions about neighborhoods gaining popularity and value now in San Francisco, CA, Portland, OR and Orlando, FL.
San Francisco Bay Area
Even in this extremely high demand, highly priced market, the concept of "up-and coming" neighborhoods applies. The city is in the process of redevelopment, a slow but dramatic series of new projects that have already and will continue to transform the city's landscape. Haruko Hata, Realtor (R) in San Francisco says "I see a big potential or demand of real estate has been created in a neighborhood when in process of development/redevelopment and lots of new businesses and money have started buzzing around there." As a result of recent development, park clean ups, community efforts, and new businesses/companies establishing themselves, Haruko notes freshly buzzing neighborhoods include the Mission District, Inner-Mission, Dogpatch, Mission Bay, and the North Panhandle (affectionately called "NoPa"). As for neighborhoods that have long term investment potential, with large and very successful tech companies setting up shop nearby (like Twitter) and the incoming Transbay Terminal, Haruko feel that SoMa's Market Street area, the city's center between 6th and 11th streets, will finally transform. These are perhaps the most blighted streets in the city now, and prices reflect that. If buyers can wait out the coming change (if that change indeed fully arrives), they could enjoy being a part of an emerging community-- for a lot less than it would have cost them elsewhere.
While I've been visiting and finally living in Portland, I've noted the North and North East in particular changing for the better. Local Realtor(R) Jeremy Fershleiser agrees. "The NE's Mississippi and Alberta Arts neighborhoods have already grown up." Does that mean the dream of getting in while the getting is good is over? No, Jeremy assures us. "Both actually have the opportunity to improve considerably more, but the clip that they are moving up at is pretty substantial. It's tough to say which one is going to do the best, but here's my impression. Most neighborhoods that are along N Lombard seem to be ripe for improvement... They tend to be pretty cheap, and even the more established ones like Kenton and St. Johns are still very inexpensive. The commercial businesses along this strip are improving quickly. That's usually a sign that it's happening now. St. Johns is actually a legitimate walking neighborhood, and getting in for at or just above the $200K point, for a reasonable sized house, isn't unheard of." The biggest influences? New businesses and the MAX line (Portland's public transportation). As these improve, so do nearby property values.
Christi Heineman, a ZipRealty agent specializing in Central Florida real estate, notes that Orlando is in a state of flux. The metro itself made news for its uptick in sales this year, and for attracting investors scooping up low priced properties. Christ notes that current up-and-coming neighborhoods in Orlando connect to new growth and construction. "One of the most up and coming areas is the 'Lake Nona' area, a huge new medical complex which, when completed, will bring 40k plus professional jobs to the area. The complex is currently under construction so buying in this area now will sure to be a great choice as the area will grow and appreciate around you."
Up and Coming for Buyers...and Sellers
Jeremy says that "As a Realtor(R), I definitely love working with buyers on up and coming neighborhoods. In the last number of years so many people have lost so much equity-- it's been nice to see those who have bought in up and coming neighborhoods limit the amount of their losses."
What about with sellers though? How does the idea of the up-and-coming neighborhood impact advice to homesellers who own in such 'hoods?
Timing is everything. Haruko says "I tell potential sellers that they want to watch the market closely and see when would be best time to sell their properties. We want to make the most of properties' values going at a fast pace. Jeremy agrees, but adds that everything depends on the seller. If the seller doesn't need to sell right away, she or he might make more renting the home out and waiting for the neighborhood to reach its full value potential.
Along with the caution to sellers, Jeremy points out something that buyers too should think about before jumping on the up-and-coming bandwagon. "Up and coming is stifled by a bad market (not that the areas don't improve, but appreciation may be slowed or non-existent if an overall market is bad enough), so if someone is banking on appreciation and the market doesn't behave, disappointment could follow. It's really important to be happy living in that liability. If knowing that the area is improving and its affordable in the meantime makes a buyer happy enough, then up-and-coming neighborhoods may be the way to go. But if buyers can afford to buy into a well-established neighborhood they already know and love, sometimes that instead is the key to happiness."
Are You Up-and-Coming?
Clearly, the decision to buy or sell in an emerging neighborhood deserves careful consideration. Talk to a local Realtor(R) about options in the area you want to live in (or sell in) to make the most educated--and happy--choice.
- Up-and-Coming: Getting In While the Getting Is Good
- Pending Sales Make for Optimistic Fall Outlook
- Search the MLS for homes in Orlando, FL
- Search the MLS for homes in San Francisco, CA
- Search the MLS for homes in Portland, OR
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