With summer winding down and the start of the school year approaching, it’s peak home buying season in neighborhoods across the U.S. Recent data from the National Association of Realtors indicates that existing homes are selling at a strong pace not seen since 2007, with sales activity up 4.5% over this time last year.
As millions of Americans survey the market for a new neighborhood, they’re taking into account quality of life features ranging from proximity to parks and public transit, to school ratings and commute times. Financial factors such as budget, estimated taxes, assessed value, and anticipated operating costs are also important.
While economic and lifestyle factors are critical, a lesser-known set of metrics can be equally helpful in identifying a home – and a community – that meets your family’s needs.
1. High barriers to entry
The presence of rigid zoning restrictions in a community and a study of development patterns can be a valuable guide for what to expect in the future. Take Miami’s Coconut Grove district, for example, which is home to some of the City’s most stringent zoning and building codes. While widespread development has encroached all over Miami-Dade County , Coconut Grove has preserved its intimate village-like vibe for decades, making it one of the country’s most desirable places to live.
2. Pricing predictability
One of the most effective measures for forecasting whether a home will retain value over the long-term is gauging how it has performed during past cycles. It may be impossible to anticipate macroeconomic ups and downs, but a look at historical sale prices for comparable properties can offer a sense of how well an area will weather a volatile market.
For example, Boulder, Colorado topped SmartAsset’s annual list of the housing markets with the most stable growth over the past 25 years. Home values there have climbed more than 300% during that span and the average homeowner in Boulder hadn’t suffered any significant price declines since 1991.
3. Rate of home ownership
Another helpful metric is the percentage of owner-occupied homes in a neighborhood. Research tells us that primary residents are more likely than renters to spend money upgrading properties over time. These improvements create added value for a community while fostering a strong sense of camaraderie among neighbors.
Owner-occupancy statistics are often available through economic development agencies and real estate websites that aggregate data by ZIP code.
Higher degrees of home ownership also result in safer communities, as residents become more invested in their neighborhood’s security and quality of life. Academic research has found a direct link between residential districts with above-average rates of home ownership and lower-than-average crime rates. Crime statistics are easy to find through local police precincts.
5. Historical context
A community’s appreciation for the past can offer a window into the future. Longtime residents and businesses in a neighborhood tend to feel a sense of custodianship and take pride in preserving the character of their surroundings. Engaging in conversation with your potential neighbors before buying is often a valuable use of time when getting to know the area.
Cities across America are competing for the so-called ‘creative class’ – young, educated members of the workforce and their families – that serve as a magnet for commerce and investment. More and more, these homebuyers are opting to reside someplace that is unique and grounded in history. Historic preservation and the adaptive reuse of aging buildings can be effective in maintaining a neighborhood’s character and spurring population growth, as we’ve seen in Brooklyn, Savannah, and downtown Chicago.
The good news for home hunters is that much of this information is readily available through public records and some time spent branching out and meeting the neighbors. A few hours of research can go a long way toward making a smart purchase.
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