Raise your hand if you plan to buy a home, stay in it for a couple of decades, and sell it for less than you originally paid.
Bueller? Bueller? … That’s what we thought.
Even if you’re not a professional home flipper, almost everyone is interested in finding the next up-and-coming neighborhood that promises rapid appreciation. These up-and-comers are often years in the making. But what many home buyers don’t realize is that it’s still possible to spot these neighborhoods before they “blow up” if you know what to look for.
Would you like to buy a home with the potential to appreciate rapidly? Here are two traits to look for in your home search that could equal big money for you down the line.
1. Look for old housing stock with lots of renovation potential.
As little as 10 years ago, West Asheville was colloquially known as “Worst Asheville”—amenity poor, seen as crime ridden (whether true or not), and trashy. But what it lacked in comparison to downtown Asheville or some of the city’s more popular neighborhoods, it more than made up for in cheap rent and potential. Now the area is one of the hippest neighborhoods in town with some of the fastest appreciating homes. All it needed was a little mural paint and some investment from local artists, brewers, restaurateurs—and, yes, home buyers.
West Asheville is the place to be right now, with its adorable Craftsman bungalows and new construction infill, but what about in another 10 years? Where will be the hottest neighborhoods then? It’s hard to predict the future with absolute certainty, but the best strategy is to look for neighborhoods with housing stock of a median age of 40 years or more. These homes are ripe for renovation! And when renovators start moving en masse into adjacent homes, the renovation and growth of business spaces and community amenities—and the accompanying appreciation of local homes—is sure to follow.
2. Look for homes in neighborhoods with low rates of home ownership.
It’s no coincidence that half of all home buyers currently on the market are under 36. Millennials, despite the rumors, still believe in homeownership as an essential piece of the American dream. But as young professionals who entered the job market during the worst period for employment in recent memory, millennials have kept what little money they have close to the tailored vest, saving for experiential purchases and waiting until later to purchase a home.
When they are ready, first-time home buyers are looking for homes in neighborhoods they know and like, as well as spots close to work and transit. In many cases, these are neighborhoods where they have been renting for years, or spots closeby. In your own home search, look for neighborhoods where most residents currently rent. These may be the spots where upcoming home buyers choose to purchase their first home—perhaps an older home in need of some renovation.
Start Looking for a Home with Big Potential of Appreciation
National real estate data should always be approached cautiously, but can be useful for shining the light on larger trends shaping local real estate markets. In Zillow Talk, Zillow’s Chief Economist Stan Humphries and CEO Spencer Rascoff use their treasure trove of proprietary data to explain how to find neighborhoods with the most potential for home appreciation.
While Zillow’s approach is data driven, it relies heavily on national data. A local real estate professional is essential to applying these larger trends to the greater Asheville, Waynesville, and Hendersonville areas. If you would like more information about finding homes with potential, our experts at Beverly-Hanks are here to help. Contact us today to speak with a Beverly-Hanks real estate agent about buying homes and land in Western North Carolina.