With many real estate markets heating up, established areas like Phoenix, Portland and Los Angeles continue to grow at a rapid pace.
Agents and clients alike are left to wonder what lesser-known regions will make a surge in the near future.
The path may be illuminated by development, like new restaurants, clubs and coffeehouses. Some forecasters point to the millennials, who remain focused on hit trends and could prove to be a huge factor in predicting new markets to invest in.
According to a Forbes report, the tea leaves include an influx of millennials. Cheaper rents and walkability will bring them to a neighborhood initially, and the retail usually follows — increasing the “hipness” of the neighborhood along with the property values.
Larry Solomon, The Guarantors, told Forbes that agents should keep an eye on the cultural vanguard. Artisanal chefs, artists, musicians and authors may have a lower price point, but their preference for amenities such as bars and cafes, yoga studios and mass transit is the same as the broader bourgeoisie that has revitalized metro real estate markets
For Angela Yaun of Day Realty Group, watching the movements of corporations relocating can be a great barometer for a market.
“Check the headlines for corporations relocating and invest in those areas,” she said. “Rental properties will be top priority, as people will need temporary housing until they are ready to purchase.”
Nikhil Choudhary, Zenith Engineers Inc., said price increases by Airbnb will hint at supply and demand.
New construction work is another key driver, noted Michelle Ames of HorsePower Team Texas/Independent Realty.
“The other obvious sign is road widening projects,” she said. “Easier accessibility means increasing values.”
Demographics are always key and population growth is a great indicator, according to Chris Ryan, Luxury Lifestyles Group / RE/MAX Crest Realty Westside.
“Key things to look for are business and population growth,” Ryan said. “If this bad neighborhood is in close proximity to a downtown district that is growing, it’s only a matter of time before you see the real estate rise.”
Like millennials, Maureen Waters of Ten-X said a thriving culinary scene (restaurants, craft breweries, wine bars) is a key signal.
“This reflects today’s preference for urban, walkable, vibrant places to live and work,” she said.
Engelo Rumora of List’n Sell Realty points to off-record gentrification is key. If the media has picked up on it, you’ve missed the boat.
A final barometer is the construction of an ace hote;.
“This may sound strange, but when I hear an Ace Hotel is coming, that is a sure sign of an up-and-coming city or neighborhood,” said Elizabeth Ann Stribling-Kivlan of Stribling.com. “It’s like the Whole Foods effect, but trendier.”