Evaluating a neighborhood

You may feel that you know a good neighborhood when you see one, but there is more to judging a neighborhood than curb appeal or stellar school scores. Dig beneath the statistics and your emotions to get the complete picture.

Unless you're buying a custom home on a rural lot, you're not just buying a house but the neighborhood that surrounds it. In many respects, the identity of a neighborhood is as important to the value of a property as individual properties themselves. In a planned community, strictly controlled architecture governs a carefully crafted identity block after block. In a rural town, tree-lined streets and an old-fashioned town square preserves a disappearing way of life. In a large city, an older neighborhood's ethnic history has shaped its character and is driving its rejuvenation.

It's important to know where a neighborhood has been --and where it is going--before you decide to buy there.

Here are some places to start:

Head for the statistics

Between FBI crime statistics, school scores now available from several national companies and demographic information culled from U.S. Bureau of the Census and other sources, it's now possible to break out a lot of valuable numbers about a community, much of it on line. This means that you as a buyer are no longer dependent on anecdotal information only about school quality or crime levels. You can see for yourself.

Go to city hall

The last thing you want to find out about the neighborhood of your dreams is that there is a huge discount-tire store due to be built on the big empty lot right across the street from your quaint Craftsman bungalow. Your town or county's zoning and/or planning authorities are good sources for any kind of planning document for the town. If you want to be sure that the rural hideaway you just bought stays that way, check with these officials. Large projects like major road construction is planned years out from the actual start date.

Catch up with the community

Want to know what's really happening in a neighborhood? Ask the local barber. It may sound like a cliché, but nobody knows a neighborhood like the people who work there day in and day out. For your part, visit the neighborhood on your own at different times of day and night. Talk to neighbors. Visit nearby schools and shops. Subscribe to the local paper. Small local papers can be chockfull of information you can use in scoping out a neighborhood or community. If you depend on public transportation, find out what is available and how accessible it is. Drive to and from the house from several different directions, not just the most scenic route that your agent used when showing you the home.

Think 'resale' potential

It's difficult to think about reselling the dream house you're about to buy, but the quality of a neighborhood will play a big role, whether you are living in least or most expensive house on the block. Get a list of homes for sale in the neighborhood from your agent to determine how many days they've been on the market. If properties haven't been selling quickly, you'll want to find out whether it's just the market (slow) or whether there are any neighborhood issues that may make resale difficult.

Finding the hot spots

A good place to start looking for tomorrow's hot neighborhoods is right on the edge of the most desirable, well-established neighborhoods. These tangential neighborhoods frequently are next in line to experience a run-up in prices. Other signs of a neighborhood heating up in popularity:

Multiple-offer home sales
An increase in the number of out-of-area buyers moving in
An increase in local residents trading up within the neighborhood
A decrease in the percentage of renters
Signs of remodeling

Hey, neighbor

A desirable neighborhood may have more than one of these elements:

Close proximity to a thriving economic center
Good public schools
Nearby shopping
Good public facilities
Convenient commute options to a major metropolitan area
Well-maintained homes
Low crime
High percentage of owner-occupants

Before you buy

If you haven't had time to thoroughly check out a neighborhood before you make an offer to buy there, include a broadly written inspection contingency in your purchase contract that includes the neighborhood and the house. Such a contingency might state that the offer is dependent upon the satisfactory inspection of both the property and neighborhood by the buyers. If you only want to buy the house if you can answer a very specific question about the neighborhood, then write this in as a specific contingency of the contract. For example, the contract might be contingent upon the buyer confirming that a restaurant cannot be built next door.

Quick Take

Property values tend to hold steady in neighborhoods with well-defined identities and assets available to everyone, such as a city park or community band shell.