One of the challenges of buying a home can be finding a good neighborhood. For someone new to the area, it isn't always apparent if a given neighborhood is on the way up or in decline.
Some people like the challenge of trying to find the next hip or gentrifying area in a struggling downtown. That isn't what this is about. This article is for homebuyers who are trying to find solid neighborhoods that will retain or increase their value over time and be good places to live for the foreseeable future.
You can never be 100 percent sure what direction a neighborhood will take, regardless of current home values there. The economy may change, certain areas may fall out of favor, certain styles of homes may become less popular. But the following are pretty good indicators of what's going on beneath of surface of a given neighborhood and that things are headed in a positive direction.
Homes are selling quickly
How long are properties staying on the market when listed? How long are "For Sale" signs remaining up before properties sell? You can check the real estate listings to see how long various properties have been on the market to get a feel for how quickly homes are selling in a given area compared to other neighborhoods.
One way to get a quick sense of a neighborhood is to see how many "For Sale" signs there are. A lot of homes for sale is typically an indication that the owners think it's a good time to sell - that demand for that neighborhood is fairly strong.
Strong traffic at open houses
Here's an excellent way to gage interest in a neighborhood - how many people are coming to open houses staged there, compared to other areas? You won't necessarily be able to tell by how many people are touring a home at the same time you are, but a glance at the real estate agent's sign-in sheet will quickly show how many visitors have come by.
Strong interest today is a pretty good sign of a neighborhood that is not only popular now, but will likely remain so for some time to come.
Homes are well kept up
How do the homes look, for properties in their price range? Are there a lot of signs of neglected maintenance? Even in a neighborhood that's modestly priced, the number of owners who take pride in their homes and make a dedicated effort to taking care of them is an excellent sign of neighborhood stability. A large number of homes with poorly kept yards and indifferent maintenance could be an indication that many of them are rentals, which can have a negative effect on property values over time.
Spring and summer are times when homeowners often undertake home improvement projects. If you see indications of a good number of these, that's a sign that homeowners are investing in their properties and are confident in the direction the neighborhood is taken. Renovations of older properties is always a good sign.
Local government is doing its share
What shape are the streets in? The sidewalks? Is the infrastructure being maintained? Are the roads leading into the area well maintained? Are the parks kept up, or are new parks being developed? In what kind of shape are the schools serving the neighborhood, the elementary school in particular? If the local government is investing in that area, that's a good sign it expects it to remain a vital one for some time to come.
It's also a good idea to check with local government offices to see what sort of projects they're envisioning over the next decade, to see where they plan to focus their resources. Rehabilitation of distressed areas isn't necessarily a good sign, but if they plan to spend more money in what are already decent areas or undeveloped ones, that's an indication they expect that area to be in demand.
Nearby construction and development
What's the status of nearby commercial areas? What sort of restaurants and shops do you find there? Does there seem to be strong demand for retail space? Are new establishments going in and is there new construction? Or does it have a tired look with the retail space filled with discount merchandisers and oddball stores? If businesses seem eager to invest in nearby shopping centers, that's a very good sign for a neighborhood; flagging interest is often a sign that nearby neighborhoods are in decline.
What about nearby neighborhoods?
Adjacent areas can be one of the strongest indicators of the direction a neighborhood is headed. A neighborhood may look great, have strong property values and committed homeowners, but if other neighborhoods close by are looking shaky, it may be only a matter of time before it spreads to the target neighborhood.
On the other hand, if a neighborhood is in only fair shape, but a similar one not far away is experiencing a revitalization, that's a good sign that better things may be in store for the first neighborhood as well.