How to predict neighborhood appreciation

Question

What factors do you look at when trying to predict whether or not a neighborhood is going to appreciate in the near future?

Is it a complete guessing game? Or are there specific things you can look at to make your predictions closer to the truth?

Joe White · Answer

Construction permits would be the main way that I would determine this.

But here in Philadelphia, its has been my experience, as a property manager, that once the media says a neighborhood will be the next fastest appreciating neighborhood, it makes it so. Under-educated investors, contractor renovating their own flips, and real estate agents, all blindly follow. That movement makes it so.

I'm sure it's the case everywhere.

Jimmy Lin · Answer

@Joe White

Lmao. People who rush to buy toilet paper because they think there will be a shortage makes it become a shortage.

Joe Villeneuve · Answer

Crystal ball, Ouija Board, Trick knee (unfortunately, this is mine), Tarot cards, neighborhood psychic(only ones that are REI themselves), etc...

Jaron Walling · Answer

Starbucks, coffee shops, bars, breweries, and trendy restaurants. Look for them and you'll find appreciation. Businesses are pumping money into the neighborhood or closing down shop.

Joe Villeneuve · Answer

What if all those businesses you mentioned on a main/busy street...because of all the driving traffic going through the area?

Joe Villeneuve · Answer

See all of the above answers...which is why I gave you my original answer.

Damon Bodine · Answer

No 100% pure way to predict it but For me New Construction, Annual Rental Growth,  New Commercial Openings are all big drivers.

Yazan D. · Answer

@Joe Villeneuve lol thats funny. But really though...what should I look at?

Account Closed · Answer

@Yazan Dabbagh There isn't a "way" to predict this, you just need to create value in the neighborhood. Appreciation is about creating value by investing in all aspects of real estate in one location, the more value in one area (nice homes, nice shopping, nice schools, etc) the more you will see the pricing rise, its a lot to do, but we do it all the time in small markets and are moving into bigger ones. Youll be expected to pay more in an area that someone has already created that value, and pay less for an area with none.

Damon Bodine · Answer

Hey @Greg Yunov for us a lot of this data comes from our brokerage.    So we're able to prepare reports for clients.    If one was to try to source it on their own   rentometer is reasonably good for rental data.  Commercial leasing data and new development  i would walk neighborhoods and take notes.   When I got started i used to knock on every door and try to become the 'mayor' of the neighborhoods I was interested in.

How to predict neighborhood appreciation

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