I always hear that xyz area in the city is growing rapidly and in 5years the land cost may rise by leaps and bounds. I want top know how to identify these kinds of area.
Same as stocks. Can you tell me which stock will rise 100% next quarter? I want to know how to identify these kinds of stocks.
Based on the number of responses, I'd say you are asking a question no one can answer.
in stocks therethere is something as intrinsic value and may suggest the under valued stock or overvalued stocks....similarly i am asking how to identify properties with good intrinsic value...
One way to predict future trends could be to use your zoning and permitting office. Look at what is being developed and built in the area. If a new community center or commercial property is being built in the near future you can determine where the neighborhood is heading.
Check the market forecasts and comps, It's also a good sign if companies like Starbucks are moving in. Most of the big names have analysts targeting the next hot area, so sometimes its an indicator.
It can be hard to predict very accurately. Neighborhoods go in and out of fashion, like other things. Usually there is some definite driver like a major development on the commercial side. In Denver, our downtown was dead dead dead for many years. A few business owners saw potential there and started putting in restaurants, with some limited success, a few years later the city decided to build a ballpark, and now it's been boomsville for the past 20 years or so and has brought the surrounding areas up with it. Of course, this coincided with a country wide demographic trend back to the city core; they didn't just create demand out of thin air.
One smart developer I know said you should look for two popular areas, and see if you can buy in a less popular area between the two. Sometimes there can be factor of external obsolescence that will keep that part of town from ever being in as much demand as the others, but more often than not the growth will spread to fill in.
@Pratik Kataria I can tell you stocks don't zoom up 100% in a year due to intrinsic value. The go up like that because the company brings something new to the table that was not previously known about the company. You don't pick those with charts you pick those with insider (not necessarily the illegal kind either) knowledge or dumb luck.
Spotting real estate trends takes first hand knowledge of the market. It's not the kind of thing that you get from data alone. You have to couple your knowledge with data which gives you the confidence to step in. You see changes and get in before the herd. Each situation is a bit unique but there are a couple of other threads dealing with the term "gentrification". Search that and you will find lots of discussion that will shed light on this issue.
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