Signs of a transitional (improving) neighborhood

[Kurt Heise]

What are the signs to look for in an area and/or neighborhood that it is improving. I know that there is a lot of money to be made if you have the opportunity to buy land/houses in an area that is improving if you catch it at just the right time. I have heard alot of things over time such as "artists are typically the first to move into the area". I always watch one company in particular in my area that seems to continue making good calls when i think otherwise. Just intersted to see who knows what i don't. Would be happy to hear any feed back thanks for your time.

[Aaron McGinnis]

I deal in in-town Atlanta neighborhoods that range from $80-800k retail points. Scoping out neighborhoods is a survival tactic for me.

Physical signs that I look for -

* Dumpsters
* Contractors coming and going
* Elimination of poverty industry (Check cashing places, title pawns, pawn shops) in favor of more bohemian establishments (Coffee shops, box stores, cafes, etc.)
* Clean-up and neighborhoods taking care of themselves. This is a pride of ownership thing. Are the streets clean? Trash piled up on the corners?
* Are people out walking the dog, or walking around looking for something to steal? Make sure walking the dog isn't cover for looking for something to steal.
* Are people putting cages on their A/C units? Bars on the windows?
* Kids out playing? What does it look like on the weekend?

In terms of statistical information, I look for stable or upward-trending sales data, short and shortening lengths of market time, and generally how hard it is to find a 'good deal'... in areas that are gentrifying, people will tend to jump on it as the margins look pretty wide. Competition tends to be fierce.

Word of caution... right now especially, local markets (At least in Atlanta) tend to bubble easily. Houses get cheap on the buy and progressively more expensive on the sell, and everyone jumps in at the same time. Rehabs tend to become more and more ostentatious as flippers try to differentiate themselves. Eventually, the rehabs outgrow the market and the supply outstrips demand. At that point, people who got in too late tend to lose their asses... Beware markets that seem 'too hot to be true.'