real estate

Neighborhoods where home prices don't fall

  • Fixating strictly on price can prove costly down the road.
  • Stable communities close to employment and transit tend to hold value.
  • School rankings and crime rates have a big impact on values.

In a world of imploding home prices, can homebuyers find neighborhoods where values will not fall?

Certain characteristics make some neighborhoods more desirable than others. Real estate industry experts say these neighborhoods are more likely to experience stable or rising home prices.

Many buyers today are fixated on price. But such tunnel vision can be shortsighted.

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"You may get a good deal on a home in an area where prices fell deeply, but it will take longer for prices to recover," says Pat Kline, a broker with Avery-Hess Realtors in Springfield, Va.

Instead, look beyond price to qualities that keep neighborhoods attractive to buyers over the long haul. Try to match your own lifestyle priorities with a solid choice of community.

"It's important most of all for people to look for a neighborhood they love and will enjoy for the long term, because that's the best way to make sure you get value from your home," Kline says.

When looking for good neighborhoods, keep the following in mind:

Search healthy 'move up' neighborhoods

"The most desirable areas tend to be close to a city and are often well-established neighborhoods," says Ben Hoefer, a real estate agent with John L. Scott Real Estate in Seattle.

In the Seattle market, neighborhoods with slightly above-median prices that appeal to buyers on their second or third home purchase have held onto their value during the housing downturn, Hoefer says.

"Buyers should avoid areas with a lot of foreclosures because it may take longer for those homes to regain their value," Hoefer says. "Areas with a lot of first-time buyers were hard-hit because they did not have a lot of equity in their home and were faster to default. It's better, if you can afford it, to buy into a 'move-up' area, although not necessarily a super-expensive neighborhood."

Liz Sidorowicz, a broker with Re/Max Signature in Chicago, says areas with long-term residents -- where many owners have lived for 15 years or more -- are likely to be more stable and see fewer foreclosures.

Consider commute times and public transportation

Not every buyer wants to live close to a city. But some suburban neighborhoods can be more vulnerable to price drops.

Kline says prices dropped dramatically in distant suburbs of Washington, D.C., in part because the long commute times made these homes less desirable.

"A Realtor can show you statistics for different neighborhoods, so you can see which ones fared better than others," he says.


Sidorowicz also says that proximity to public transportation is valuable.

"Anything close to a train or metro line, whether you are in the suburbs or in the city, will keep its value," says Sidorowicz. "Also, look for communities that are convenient to major employment centers because there will always be a larger pool of buyers looking in that area."

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