Are you a first time home buyer or love to be head of the pack? Here is a list of the top ways to spot a diamond in the rough, and make a return on your investment when purchasing your new home in an up and coming neighborhood.
1. Trendy businesses are moving in
If there is a sudden influx of artisan bakeries, gourmet coffee shops and Instagram worthy brunch spots, you know these are signs of an up and coming neighborhood. This little known fact is backed up by economic research that many industries are doing before they set up shop in an up and coming area. If a Whole Foods is on its way, so should be your offer package.
If you are looking to move to a city like Los Angeles, which is highly populated and has a vast availability of employment opportunities, you know that every part of that city will be changing and growing. There is only so much real estate available on the market and so many new homeowners trying to move in. Another well known fact to city planners is that neighborhoods near freeways, bridges and public transportation are key zones for urban redevelopment and will result in high demand over time.
3. Tastes are changing
New home buyers have a different set of values than their parents and what was once considered a nuisance, like living behind a commercial unit, is now cool, especially if it’s a store like Warby Parker or a restaurant like Gjelina in Venice.
Look out for neighborhoods with a particular architectural style like Midcentury Modern or Spanish-style. When a new generation of home buyers falls in love with this trendy look, there will be a surge in home purchases in the area, and you don’t want to get lost in the shuffle.
5. Economic Developments
If a new company HQ is moving into an area, this will definitely increase interest for new homeowners. Just as recently as this month, The LA Times ran a story on the Venice housing boom as soon as Snapchat announced their IPO. Companies like Google, Facebook and other start ups love to discover and innovate, meaning they will always be ahead of the curve when it comes to company real estate. Be aware of where they plant their seeds and be sure to follow.
If a neighborhood with a number of run down homes is experiencing interest from developers, be on the look out. This means that the older, run down homes will soon be replaced with shiny new ones fresh for your picking. If you want to play detective, visit the city building permit counter and ask the staff if they have seen an uptick in investment in the area. City staffers often have a wealth of information regarding everything from pending commercial development to city projects.
7. Decrease in DOM
Be on the lookout for how many days a listing is on the market. For a more accurate report, ask your agent to create a CMA. If homes are selling in less time than they used to, it means there is a surge in the market and you want to be aware as availability will soon be scarce and the prices increasing.