What Makes a Neighborhood HOT?

I'm often asked "What neighborhoods in Pittsburgh PA are "Hot" or "Soon To Be Hot"? While there isn't a blanket answer, there are clues to help either spark an interest or extinguish rumors. So how do you find the next hot neighborhood?

If you see businesses, especially those that are trendy, moving into a neighborhood it could be a sign that the overall dynamic of that neighborhood is changing. Here in Pittsburgh we have seen large established corporate businesses expanding like Amazon, Uber, Google, Argo AI, Autodesk, Facebook, Starbucks etc. We also see the trendy businesses like Whole Foods, Craft Beer and Blaze Pizza moving into the "urban and active" areas looking for a piece of the action. New restaurants with artisan menus are trying to captivate patrons while unique and distinctive shops that cater more to a tech-oriented society are making their move into those revitalized markets. Case in point is an area here in Pittsburgh called Lawrenceville that was once part of an industrialized Pittsburgh, now catering to a wide variety of businesses that have rejuvenated this community. While Lawrenceville is further along in its renewal, other areas are starting to see a renaissance awakening.

So what areas are seeing this kind of renovation? Typically ones where the infrastructure has already been laid out. Lots of buildings, but still room for growth. An area that is close to freeways, bridges and public transportation. Most often urban communities where you see a lot of activity happening i.e., people renovating homes, lots of people walking around, traffic (ugh), are those neighborhoods that have already seen renewal, but may still have room to grow and evolve further. Areas that may soon go from smoldering to flaming are those that have the infrastructure already in place but need investors and homeowners to come in and feed the fire!

If you are noticing that an area is changing from being crime ridden to getting rid of crime, this could be a neighborhood poised to make a comeback. Look at crime statistics and notice the changes, including the changes to the types of establishments that have moved out as well as those moving in. If you notice that people are out and about late at night, unafraid of the environment, then that's typically a sign of a safer neighborhood that has a nightlife. You may notice that when a major employer moves into the area and other businesses start moving in, this causes more traffic flow and activity with people walking the neighborhood. This often keeps criminal activity at bay. Not always of course, but certainly a deterrent. However, bear in mind that one major player does not breathe sustaining life into that section of the city. Look for many types of industries moving in.

Ok, so let's talk about moving in or buying into that hot neighborhood. What should you look out for? Well, take a drive through the neighborhood. Unable to do so because you are from out of town, yet interested in a market? No problem, find a real estate professional that knows that area and can offer advice. In other words someone who is your "boots on the ground". If you are noticing a lot of rehabs, renovations and new construction going on this may be a sign that the area is turning around. Statistically you can always find out information about city permits being issued, and many times city workers have a wealth of knowledge to share such as any impending commercial plans or growth projects slated for a neighborhood. And speaking of statistics, you may want to look at property values increasing, days on market decreasing, home/rental property sales increasing along with rising rents. The idea here is to analyze this data and use it to help make your decision.

Of course all of this is subjective and certainly not complete. You may have additional ideas you feel makes a neighborhood hot or soon to be on fire. Feel free to share them. Investor online forums are first and foremost educational platforms to share ideas.

My opinions, in this specific blog, are meant to offer ideas of the signs to look out for when evaluating the "hotness" of a neighborhood. Hopefully you will be able to recognize them early while they are smoldering so that you can stake your claim in a hot market that is ON FIRE!!!