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Picking the next "hot" neighborhood
For Immediate Release On: 1/6/2009
For Further Information, Please Contact:
Margaret Jackson - Denver Post at mjackson@denverpost.com
Relevant Info on the Web: http://www.denverpost.com/economy/ci_11381629
The signs of a hot neighborhood are clear. Trendy new restaurants, salons and eclectic shops start cropping up.
But identifying an up-and-coming area before the masses arrive takes foresight and a little luck.
Broker Paul Tamburello of Distinctive Properties has spent years working in the Lower Highland neighborhood east of Federal Boulevard between downtown and the West Highland area near 32nd Avenue and Lowell Boulevard. He subscribes to what is known as the "barbell theory."
"You want to look at the area between two ends of a barbell," he said. "West Highland had already gentrified and was doing well, and Riverfront was about to explode onto the scene."
He also suggests looking at where artists and the gay population are concentrating: "They tend to take more risks and are willing to go into neighborhoods that are emerging."
Lon Welsh, managing broker of Your Castle Real Estate, analyzes Metrolist data to determine the status of a neighborhood. He said a good leading indicator is the number of distressed properties in a neighborhood.
If a neighborhood is still grappling with a high number of bank-owned properties, values are pushed down and owner-occupants take their houses off the market.
"Eventually, it reaches a peak, and the prices bottom out," Welsh said. "Then the owner-occupants start to sell. They all start putting their houses on the market in good condition, and the prices bounce back relatively rapidly."
That may be the time to buy, but the theory is not foolproof.
"Trying to predict it is like catching a falling knife," Welsh said. "Not every neighborhood will hit bottom at the same time."
Jack O'Connor of Prestige Real Estate looks at the inventory of a neighborhood — the number of homes for sale — to determine whether it's on the way up or down.
"If the inventory is low in a particular area, that's the place to buy because the likelihood of prices going up is substantial," he said.
Only licensed real-estate agents have access to multiple-listing-service statistics, so how can the rest of us make an educated guess?
"I look for innovative new projects and renovations of existing properties," said Dee Chi rafisi, an agent at Kentwood City Properties. "I have joked in the past and said if you see a lot of construction Dumpsters and Porta-Johns, you know you are in the next hot area."
Gretchen Faber, broker manager of the Kentwood Co. in Cherry Creek, said walkability is critical.
"Look for neighborhoods that are close to other really great places with amenities and have some room for properties to be improved," she said. "Baker is a neighborhood that I love, and it's always been sort of a hidden gem. Jefferson Park is going to be a great neighborhood with the proximity to downtown and the Highlands."
About Trenka & Associates: Trenka & Associates is one of Downtown Denver's leading Real Estate Companies. http://www.condosandlofts.com
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