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Best of St. Louis
Best Up-and-Coming Neighborhood - Benton Park
A neighborhood is at
its best when it's not yet "up" and just barely "coming"; when it's
yet to be completely gentrified, there's a willful, renegade
atmosphere in its air and the creative, adventuresome types are on
full display. Benton Park is at its best right now: It's diverse,
safe and still wide open to newcomers. Located in South City
(borders: Gravois on the north, I-55 on the east, Cherokee on the
south, Jefferson on the west), the neighborhood is anchored by two
early arrivals, now thriving: Frazer's Traveling Brown Bag and the
Venice Cafe. A high-end restaurant (Sidney Street Cafe) flanks the
north end, a nice new bakery (the Black Bear) is at another border,
and there are just enough empty storefronts to create a feeling of
infinite potential. At its heart, though, is what makes every urban
neighborhood interesting: shady streets, two parks, fancy South City
masonry and just enough raw material to create a feeling of an urban
frontier.
Readers' Choice:
University City
America's Next Hot Neighborhoods
Ten areas that offer both
affordable housing and rapidly rising home values in some of the
country's largest cities
By Maya Roney
All data and images provided by Zillow.com
Zestimate: Estimated market value of a home. Computed using a
proprietary algorithm that considers a number of publicly available
data points for all the homes in a given area (not just homes sold).
It is not an appraisal. Variations occur because of negotiating
factors, closing costs, and timing of closing, but Zillow says the
majority of its Zestimates are within 10% of the selling price of
the home.
Zindex: Median Zestimate valuation in a given region. Exactly half
the Zestimates are below this number and half are above it.
Neighborhood: A center point and homes within a 1 mile radius of
that center point in a given city.
BusinessWeek.com looked at the city neighborhoods with the highest
five-year percent changes (six-year change in New York) in Zindex
(median home value) where the neighborhood Zindex was below the city
Zindex, and excluding neighborhoods where the Zindex was above the
city Zindex. The results are neighborhoods that have seen
significant home value appreciation in the past five years where
values still remain low relative to home values in the greater city. City Zindexes show valuation as
of fourth quarter 2006.
St. Louis
(Zindex: $138,823)
Most Up & Coming Neighborhood: Tiffany
Q4 2006 Zindex: $132,374
Q4 2001 Zindex: $57,435
5-year change: 130.48%
Tiffany is a historic district part of St. Louis' South City area,
one of the city's most racially and ethnically diverse
neighborhoods.
Runners-up: Tower Grove,
Benton Park
Boston
(Zindex: $415,483)
Most Up & Coming Neighborhood: Dorchester
Q4 2006 Zindex: $331,896
Q4 2001 Zindex: $207,924
5-year change: 59.62%
Dorchester is the largest neighborhood in Boston, located south of
the city center. It is a diverse working-class community with many
African-Americans, Vietnamese, and Irish immigrants. The area's
Franklin Park features 527 acres of green space, a zoo, and an
18-hole golf course.
Runners-up: Mount Bowdoin, Grove Hall
Chicago
(Zindex: $240,187)
Most Up & Coming Neighborhood: East Garfield Park
Q4 2006 Zindex: $214,757
Q4 2001 Zindex: $110,142
5-year change: 94.98%
East Garfield Park, located on the West Side of Chicago, is seeing
revitalization after years of neglect. The improvement is due to its
proximity to downtown, historical homes, and access to mass transit.
Runners-up: Cicero, Lower West Side
Denver
(Zindex: $208,773)
Most Up & Coming Neighborhood: Civic Center
Q4 2006 Zindex: $188,880
Q4 2001 Zindex: $162,140
5-year change: 16.49%
Denver's Civic Center contains numerous museums and government
buildings and is the site of many festivals and parades. The city
has recently cracked down on drug-dealing and crime in the area and
begun to add new pedestrian crossings, bus areas, and kiosks.
Runners-up: Skyland, Sandown
Los Angeles
(Zindex: $597,784)
Most Up & Coming Neighborhood: Pico Union
Q4 2006 Zindex: $516,498
Q4 2001 Zindex: $129,621
5-year change: 298.47%
Traditionally one of the poorest neighborhoods in Los Angeles, Pico
Union seems to be in the early stages of gentrification with
increased development on the area's fringes. It is heavily populated
by Hispanic immigrants and also has a number of Korean businesses.
Runners-up: Jefferson Park, Mid-City
Miami
(Zindex: $329,963)
Most Up & Coming Neighborhood: Little River
Q4 2006 Zindex: $314,768
Q4 2001 Zindex: $91,351
5-year change: 244.57%
Part of Miami's “Little Haiti,” Little River is home to many Haitian
Creole residents. The crime rate has decreased in recent years, and
the area is experiencing a boom due to its close proximity to the
Design District and the development of the new nearby Edgewater
community.
Runners-up: Lemon City, Model City
New York
(Zindex: $936,439)
Most Up & Coming Neighborhood: Kingsbridge Heights, The Bronx
Q4 2006 Zindex: $442,544
Q4 2000 Zindex: $99,546*
6-year change: 344.56%
Kingsbridge Heights is a neighborhood in the West Bronx near the end
of the No. 1, 4, and D subway lines. The area has seen a marked
increase in luxury rental and co-op building construction in the
past few years due to its location, good schools. and parks.
Runners-up: Bergen Beach, Downtown Flushing
Phoenix
(Zindex: $229,234)
Most Up & Coming Neighborhood: Cashion
Q4 2006 Zindex: $198,951
Q4 2001 Zindex: $75,355
5-year change: 164.02%
Cashion is a recently annexed neighborhood in West Phoenix.
Inexpensive housing developed in the 1950s has attracted many
immigrant families from Mexico and Latin America, making the area
one of the most diverse in the metropolitan area.
Runners-up: Central City, Villa Monte Vista
San Francisco
(Zindex: $835,895)
Most Up & Coming Neighborhood: Mission Bay
Q4 2006 Zindex: $704,678
Q4 2001 Zindex: $313,391
5-year change: 124.86%
Located on the central bay shore of San Francisco, Mission Bay was
created in 1998 as a redevelopment project. In place of warehouses
and shipping yards, the area now features luxury condos, high-end
restaurants, and biotech research facilities.
Runners-up: Tanforan, Hunter's Point
Seattle
(Zindex: $447,927)
Most Up & Coming Neighborhood: University District
Q4 2006 Zindex: $436,524
Q4 2001 Zindex: $232,294
5-year change: 87.92%
Seattle's “U. District” is the home of the main campus of the
University of Washington and one of the city's oldest communities.
It has suffered commercial decline in recent years but remains the
location of many street fairs, farmers' markets, and student bars.
Runners-up: Georgetown, Dunlap
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America's Next Hot Neighborhoods
For price-sensitive buyers, we
identify the areas in the U.S.'s largest cities that offer the best
quality of life and investment potential
by Maya Roney
"Up-and-coming," "gentrifying," "on the rise"—terms like these
can be realtors' rhetoric or a red flag for homebuyers. But
less-pricey city neighborhoods where home values have shot up in the
past few years are worth scouring for deals, especially now that
prices have dipped in many areas (see BusinessWeek.com, 2/19/07,
"Out of the Basement for Housing").
There's usually more behind their increase in value than just the
overall increase in property values across the U.S. over the past
five years. Factors such as schools, improved crime rates, high
employment, and access to public transportation make these
neighborhoods increasingly appealing to price-sensitive buyers.
BusinessWeek.com worked with online real estate service Zillow.com
to come up with a list of the next hot neighborhoods in 10 of the
country's biggest cities. Looking at Zillow's database of historical
home valuations, we identified the neighborhood in each city that
saw the most median home-value appreciation in the past five years,
excluding neighborhoods where the median home value was currently
above the median home value for the city.
The result: neighborhoods with both relatively affordable housing
and a recent history of significant appreciation. Though identifying
undervalued and undiscovered areas is far from an exact science,
these neighborhoods have what it takes to become solid
investments—and places to live. In spite of double-digit
appreciation in the last few years, the areas' low home values
(compared to the overall cities) suggest there's still room for
considerable growth.
Downtown Deals
Several years back, the working-class immigrant neighborhood of Pico
Union in downtown Los Angeles was one of the poorest parts of the
city. The median home value in the fourth quarter of 2001 was
$129,621, according to Zillow. Today, 500-square-foot condominiums
are selling in the $300,000s, according to Stephen May, a real
estate broker and condo specialist at L.A.'s Downtown Residential
Realty. And that's the low end—$4 million penthouses aren't an
unusual find in this rapidly gentrifying neighborhood.
"There's a boom going on downtown," says May. "Homes are now
available in any price range." Of course, not everyone is benefiting
from the rise in prices in Pico Union. The traditional low-income
immigrant community, largely from El Salvador, is being forced out
of the neighborhood by rising rents and the bulldozing of old
buildings.
According to Zillow's estimates, home values in Pico Union have
soared almost 300% in the past five years, to a median home value of
$516,498. But in Los Angeles, where the median home value is nearly
$600,000, Pico Union remains a steal for many buyers.
City centers are often good places to find value neighborhoods. They
may have higher crime rates, but they have become increasingly
appealing to affluent professionals looking for transportation hubs,
pedestrian accessibility, and an urban social scene. Artists and
so-called hipsters may also sacrifice a little space and safety for
a cheaper home in a diverse and creative area.
Like downtown L.A., Denver's Civic Center neighborhood is seeing
revitalization as the city cracks down on crime and spruces up the
streets and sidewalks. Qwest Communications (Q) remains the top
public employer in Denver. Strong local economies are fueling the
growth of other city neighborhoods on our list—most notably in the
Mission Bay part of San Francisco, where retailer Old Navy, which is
owned by Gap (GPS), is headquartered.
Beckoning Boroughs
Good values exist in just about every city, if you know where to
look. In notoriously expensive New York City, homebuyers can find a
relative bargain in the community of Kingsbridge Heights in the
Northwest Bronx, where the median home value is $442,544, compared
to the city's $936,439.
Zillow estimates that the median home value was $99,546 in the
fourth quarter of 2000.
Kingsbridge Heights has always been a middle-class neighborhood with
decent schools, but some surrounding Bronx areas have a
less-than-stellar reputation when it comes to crime and school
systems. This may have shielded the area from buyers in the past,
but the area's proximity to mass transit (you can easily hop on the
1, 4, and D subway lines to Manhattan) has turned it into a hot spot
for Manhattan rent refugees.
"There seems to be a marked increase in Manhattanites starting a
family [buying in Kingsbridge Heights]," says Brad Trebach, a
realtor based in the neighboring community of Riverdale. "They're
looking for elbow room, a neighborhood with trees and grass." Given
its proximity to 1,000-acre Van Cortland Park and the Jerome Park
Reservoir, Kingsbridge Heights has plenty of space and greenery to
offer.
Venturing to the fringe may also pay off in other cities, like
Boston, where the neighborhood of Dorchester remains affordable even
though home values there have increased nearly 60% in the last five
years. The median home value is now $331,896, according to Zillow.
Almost a separate city in itself, Dorchester is a large and diverse
working-class community south of Boston's center, with many Irish
and Southeast Asian immigrants, as well as a significant African
American population. Residents enjoy riverfront amenities like
beaches and boating, as well as the green space and recreational
activities of 527-acre Franklin Park.
Focus on Possibility
The phrase "up-and-coming" can sometimes be code for a dangerous
area, so it's important to make sure you're comfortable with the
neighborhood and the potential risk it may pose to you as an
investor.
Whether you're searching for the next hot spot or just trying to
find a cheap and funky place to live, homebuyers in so-called
up-and-coming areas should focus on four main factors, according to
Thaddeus Wong, co-founder of @Properties, a Chicago-based brokerage
specializing in emerging city neighborhoods.
First and foremost, consider the neighborhood's transportation
infrastructure. Is it close to mass transit and highways? Is the
transport fast and efficient? "In a developing neighborhood, the
ease of getting in and out is crucial," says Wong. "We've seen the
highest velocity of price increases in these areas."
A neighborhood's commercial infrastructure—whether it has space for
restaurants and shops, heavily trafficked streets, and ample
parking—is also important in determining the area's potential for
success, Wong says. "You have to bring people in with art galleries
and restaurants. That's how people become familiar with
neighborhoods."
Neighborhood zoning laws also play a role, according to Wong. If the
zoning is more flexible and for larger or more units, either
residential or commercial, the area will gentrify more rapidly. The
wild card, Wong explains, is local politics—some politicians don't
want development, while others embrace it.
Everyone knows someone who bought a home in an undesirable
neighborhood and got rich when the area got hip. But anyone buying
in an area that hasn't seen any recent development is gambling. To
play it safe, make sure the neighborhood has something going on
before you take the plunge. "You don't want to be the first guy
there," says Wong. "You're better off being the second or third one
in."
Methodology
Zillow arrives at its home valuations, called Zestimates, using an
algorithm that considers a range of publicly available data for all
the homes in a given area (not just the homes sold). While this
isn't an appraisal, Zillow says the majority of its Zestimates are
within 10% of the selling price of a home.
Using Zillow's database of historical "Zindexes"—the median
Zestimate in a given region—we identified the neighborhood in each
city that saw the most home value appreciation in the past five
years (six years in the case of New York City), excluding
neighborhoods where the median home value was currently above the
median home value for the city. Zillow identifies a neighborhood as
a center point and homes within a 1-mile radius of that center point
in a given city.
Last updated:
Sunday, March 18, 2007
