July 24, 2015

Good and Bad Signs in a Neighborhood

Like most things in real estate, neighborhoods are constantly changing in value. In some cases they can improve rapidly and decline gradually, but more often than not they change slowly, over time.

Ideally, you want to buy property in neighborhoods as they’re appreciating. You certainly don’t want to pay top dollar in a neighborhood which is in decline. So how can you tell which direction things are heading?

Home values over time are one way to tell, but they tend to lag behind the trends. Values reflect what the current situation is… they don’t predict the future.


While you definitely want to observe a neighborhood first-hand at different times of day and night, here are some other indicators of neighborhood value trends:

Positive indicators:

  • Homes are receiving multiple offers
  • Schools are well-rated and in demand
  • Young families and creative types are moving to the neighborhood
  • Older couples choose to remain in the neighborhood as they age
  • Commercial properties are quickly redeveloped and leased


Negative indicators:

  • The number of homes converted into rentals has increased
  •  Homes remain on the market longer
  •  Companies are relocating away or shutting down offices
  •  Commercial spaces are vacant for long stretches


Sometimes you can spot the potential in a bad neighborhood, but it often means you have to put up with the bad neighborhood for a long time before reaping the rewards. It’s a good idea to evaluate neighborhoods with these indicators in mind. Neighborhoods you have traditionally regarded as “good” or “bad” may have (or be under) significant change.

I am more than happy to help you with neighborhood research! Talk to me today to begin your hunt: ScatesRealtyInvestments.com