Can an entire neighborhood or community be overprice or underpriced?

[Jerrold Stallworth]

Hi all,

I once heard a seasoned investor say that a particular neighborhood in Chicago is overpriced now. This neighborhood, Bronzeville, has lots of brown and greystone buildings that were very cheap a decade or so ago. Now, lots of young professionals have bought properties there that were completely gutted, rehabbed and are now quite stunning and worth 400K + and up to almost 2M.

My burning question is that I want to know is can a entire neighborhood or community be overpriced or underpriced, and if so, how is this determined. I'm familiar with Market Analysis or rather I've heard of them but what benchmark is used if any to conclude that a community is underpriced and thus a great buy or overpriced and not worth the time to investigate.

forgive me if I have overlooked something very fundamental.

Thanks to all.