How to Find the Next Hot Neighborhood

    Finding the next “Hot” neighborhood is a highly coveted real estate dream. In booming San Diego County, the “Hot” neighborhood is constantly evolving.
    A few years ago, the hot neighborhood was North Park. The real estate prices in this neighborhood have skyrocketed as the area is revitalized with hip new restaurants and a happening downtown scene. It has become one of the hottest neighborhoods in San Diego. In 1999 a 3 bedroom home on 33rd street, in the heart of North Park, sold for under $200,000.00. In 2011 a 3 bedroom home on the same street sold for $565,000.00, and in June of last year a 3 bedroom home on 33rd sold for $624,000.00. A savvy real estate investor who could predict this boom in real estate  could have made millions of dollars with wise real estate investments in the North Park neighborhood.
    So how do you predict the next up-and-coming “Hot” neighborhood? Follow these tips to get a leg up on the competition when deciding where to buy.
    Search inside and adjacent to downtown. 
    Troubled spots within a downtown are prime for gentrification and therefore can be a good investment. As our population increases, the downtown area will continue to spread farther and farther outward. The “fringe” areas will be engulfed in the downtown energy. North Park is a prime example of a neighborhood adjacent to downtown.
    Look in typically low-rent neighborhoods.
    Reviewing rental prices in your metro to find the low-rent areas can prove to be quite advantageous. These low-rent areas are likely to be fast growing areas as young adults, new families and others seek to be close to down-town, but can’t afford the down-town prices. Along with real estate investors, developers will also be sniffing out these areas to snap up properties and create new housing, which in turn will drive up prices all around.
    While a low-rent area may seem like a negative for current residents, new residents will find an appealing atmosphere for a thriving and active fresh start. As new residents move in, they are likely to start businesses and families to create a vibrant community in the area.
    Find areas with older homes.
    It might seem counter-intuitive, but older properties are likely to appreciate more. This is one of the strongest indicators of an up-coming neighborhood. Older homes are ripe for renovation, which allows home values to increase significantly as the quality of homes improves. Older homes may have desirable historic details or be in historic areas of town that are on the cusp of experiencing a renaissance. North Park is also a perfect example of this. The craftsman style homes built in the 30’s and 40’s are being renovated inside to feature modern amenities, such new appliances and open floor plans, while preserving the unique architectural style of the era they were built.
    Of course, none of these are guaranteed, and the timeline is different for each neighborhood. But predictors show a solid investment opportunity in areas with the right conditions.

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