For the young and employed, choosing where to live is often more of a lifestyle decision than strictly a matter of cost or proximity to work. Hip neighborhood? They’ll be there.
Once word gets out that a neighborhood is trendy, prices shoot up as the available inventory falls through the floor. That’s the key finding in a new study that names the hottest locations of 2013, according to Redfin, a firm that calls itself a "technology-powered real estate broker."
Redfin tasked its agents with identifying up-and-coming areas, selecting “the three hottest 'hoods in each market." Then they rolled up year-over-year data changes in categories such as number of available listings; median price per square foot; sales volume and sale-to-list ratio. The neighborhoods with the most consistent gains were deemed hottest.
As you might expect, hot neighborhoods are all rising in price faster than the metro areas that contain them, says Redfin. One reason for this is constraint: There’s simply not enough housing supply to meet market demand.
Nowhere is this trend of hotness playing out more compellingly than in the Highland Park neighborhood of Los Angeles. Sales have shot up 73% in Highland Park from Dec. 2012 vs. the prior year, while prices have gained 31% and – perhaps most tellingly – supply has decreased by 48%.
What’s the appeal? "Highland Park is in the northeast corner of L.A., where it's relatively lush, green and surrounded by hills,” reports Earnest Watts, a Redfin agent. “York Boulevard offers a main artery for this community, with an increasing amount of hip restaurants, bars, and shops.”
Chicago’s Logan Square has seen prices jump 20% in the past year, while the number of sales has shot up by a whopping 94%. Greg Whelan, a Redfin agent in the area, explains the interest: "Logan Square has many attractive features, including wide park-like boulevards, a unique mix of housing types, public transportation, bike and walking paths, progressive local shops and a really cool vibe.”
Seattle’s North Maple Leaf is another neighborhood has seen a little more modest gains, but prices have still jumped 22% over 2011 with 44% fewer available listings. “Homes that go on the market sell very quickly in this area,” says Chad Pluid, a Redfin agent. Perhaps that trend will continue into 2013 because home prices are lower, he says, than some of the surrounding neighborhoods – plus, there’s easy access for a downtown commute.
Redfin CEO Glenn Kelman refers to these neighborhoods as “once-gritty urban areas and far-flung suburbs with school districts on the rise.” He adds, “This is the surest sign that the recovery is broadening, and that home-buyers are venturing out to once-marginal areas hit hard when the bubble burst.”
Redfin agents frequently cited new restaurants, a hip local vibe, good schools, and convenient commutes among the factors that will drive buyers to these areas.
Hottest Neighborhoods in 2013
|10||Seattle, WA||N. Maple Leaf||-44%||+22%|
|9||San Francisco||The Mission||-29%||+80%|
|7||Los Angeles||Glassell Park||-64%||+17%|
|6||San Jose, CA||Willow Glen||-60%||+32%|
|5||S.F. East Bay||Livermore||-71%||+20%|
|4||Los Angeles||Eagle Rock||-54%||+11%|
|3||Los Angeles||Faircrest Heights||-63%||+29%|
|2||San Diego||Mira Mesa||-69%||+21%|
|1||Los Angeles||Highland Park||-48%||+31%|
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