Are you on a modest budget, but looking for a new home in a property location that’s thriving, has good schools, and offers the lifestyle you want for you and your family? If that description fits your situation, searching for homes in an up and coming neighborhood is a great option.
A transitional (or up and coming neighborhood) is one that isn’t very popular or established yet, but there’s evidence that it’s poised for rapid growth. Home prices are still affordable, and your appreciation over the next few years will likely increase quite a bit.
At Home Bay, our team of expert researchers and real estate experts look for ten tell-tale signs of an up and coming neighborhood — ranging from recent home sales to a growing small business community.
1. New Small Businesses Are Moving to the Area
Watch for “coming soon” signs from local businesses. When a well-known company moves to the area and starts putting in more stores, it is a sign that the neighborhood is poised for growth.
You can find out what businesses are coming to an area by checking with:
- The Chamber of Commerce (you may have to join to have access to this information).
- Local elected officials, such as a city council member or county commissioner
- A real estate broker
Real estate professionals familiar with the area are likely aware of new developments, business leases, and the like.
2. There Are Frequent, Well-Attended Community Events
Weekly street fairs, outdoor concerts, art shows, farmers markets or food truck expos that are well attended by locals show that the area is attracting residents and showing signs of continued growth.
Check your local newspaper or government website — perhaps under cultural affairs and special events — to see what’s going on in the city you are interested in, and pay attention to the neighborhoods where these events are being held.
3. It Has Access to Major Roadways
Real estate areas with access to public transportation, major highways or similar forms of easy access are likely to grow over time. This is particularly important when living near large cities, since transportation plays a key role in accessibility for work.
Of course, a neighborhood near major highways and modes of transportation doesn’t automatically mean it’s easy to get around or cheap to commute. Our friends at Clever compiled a list of Best and Worst Cities for Commuters, and as you can imagine, some of the major cities that have easy access are on the worst list because of traffic and cost of car maintenance and gas.
For example, the 10 worst metros for commuters include Detroit, Atlanta, and New York , and have higher rates of traffic and are more expensive to commute within. And, people in Detroit, San Francisco, and New York spend the most money per year on their commutes, averaging 47% more than the typical annual commute cost in the average city.
4. There’s New Construction
Builders do extensive research before they decide where to start a new project, and seeing bulldozers and jackhammers shows that they identified an opportunity for growth and profit.
You can also call your local building or zoning department to find out about upcoming construction in a particular area. Your Secretary of State’s office corporate division is another resource, as most businesses are required to register with them. Many states have searchable online directories of registered corporations.
While you may not be able to sort by date to find the most recent licenses, some corporation division’s may offer a date-sorted list for a small fee.
The National Association of Home Builders also reports national stats on. housing starts (ground breaking on a new home) and permits. For example, housing starts in the U.S. south led the country for the first six months of 2022 – with an average of four times as many as in the northeast or midwest. The west came in second, and the northwest was last out of the four regions of the U.S.
5. Homeowners Are Making Improvements
Homeowners in emerging neighborhoods are more likely to spend money on major repairs like a roof replacement or a deck overhaul.
When the market is lukewarm, an owner isn’t likely to get money back on major repairs. But when it picks up steam and buyers are hungry for a slice of the pie, owners know they can enjoy upgrades and can make enough profit on their sale to earn the repair cost back.
Building permits are required for home expansions and major renovations. You can check the local building code enforcement department to find out if a particular area or neighborhood has a number of permit requests.
6. There are Neighborhood Organizations and HOAs
HOAs and neighborhood organizations can ensure that the curb appeal remains high, which has positive benefits for overall home and neighborhood valuations.
A simple Google search will likely reveal the organizations, block clubs and HOAs in a particular neighborhood. You may want to investigate these organizations as well, particularly HOAs, as they have their own set of pros and cons.
» Learn More: Does the Home Seller Pay HOA Transfer Fees?
7. You See City Development Projects
City development projects, such as putting in new public buildings or parks, suggest that the city and state are investing in the area. As a result, home prices are likely to rise.
Check with the local planning and development department for the city or neighborhood in question to see what development projects are in the works.
8. Schools Are Improving
When the schools start improving and have better test scores, you will see more families moving into the neighborhood, which increases home prices and values.
9. It’s Walkable
Walkability, or the ability to walk freely and safely in the neighborhood, is a positive sign when related to growth and development. If the neighborhood is putting in more sidewalks or making changes for better walking and bike riding, the area is likely to continue to see positive changes.
Check out the walkability scores of neighborhoods you’re considering at Walkscore.com. Walk Score analyzes hundreds of walking routes to nearby amenities, and awards points based on the distance to these amenities in each category. Walk Score also measures pedestrian friendliness by looking at population density and road metrics such as block length and intersection density.
10. Homes Are Selling Quickly
Consistent sales and quick turn around rates suggest that the area is growing. Look for neighborhoods where homes are moving fast.
You can take a look at local new home listings, or contact a local real estate professional to get their perspective on what neighborhoods are selling out quickly.
FAQs About Up And Coming Neighborhoods
What is a transitional neighborhood?
A transitional, or up and coming neighborhood, is one that isn’t very popular or established yet, but there’s evidence that it is positioned for future growth. Learn more about transitional neighborhoods.
What’s the best place to buy real estate?
Whether you’re looking for a home to live in or an investment property, the basics are the same – you want to buy in real estate areas where your return on investment is high. So, buying in an up and coming neighborhood is a great strategy. Learn more about discovering up and coming neighborhoods in your area.