Speculation vs. Continued Appreciation?

[Mark Douglas]

I'm in Nashville, TN, a pretty competitive market.  In many of the once unpopular areas (only a few years ago), older homes are being torn down to build two homes on the same lot, each going for upwards of $300k+.  I'm not one to "catch the fever", but it is hard to ignore to rapid expansion of new construction.  Regular homebuyers (not investors) are paying considerably more than properties are appraising for, and even these higher priced homes are under contract within days of being listed.   

What's the difference between speculating future (continued) market appreciation vs. buying in the PRE-GENTRIFIED areas because "it looks" like that's where the attraction is headed?  Is it generally considered safe to begin investing in those post-gentrified areas (paying near-market rate) or is it too late to realize any gains after the big guys have built, sold, and moved on?

Are these neighborhood shifts more regulated by state/local organizations heading up the movement, or are they just becoming popular by word of mouth?  In other words, I wouldn't able to start the next wave of people moving to such-and-such zip code, if I built a new house.  I'm thinking it would take the attention of a developer coming in and doing X amount of new builds.   

I don't know that there's a particular question in there, just something I've been tossing around upstairs :)