Making The Transition

Convenient location, trendy newcomers, access to amenities, architectural quality combine to give neighborhoods an edge

July 10, 2005|By Will Morton | Will Morton,SPECIAL TO THE SUN

To would-be homebuyers looking for the next Federal Hill or Hampden: Take heart. There are signs to help you figure out if a neighborhood teetering on the edge is going to turn the corner.

Urban experts say that betting on a transitional neighborhood doesn't have to be a crapshoot. There are no guarantees, but learning how to gauge a neighborhood's chances can improve your chances.

With prices skyrocketing, people are increasingly searching out marginal neighborhoods, hoping to get a toehold in an area that - if it takes off- could become unaffordable.

Across the country, an aging population and a lack of land are helping to propel that trend, said Lisa Maxwell, an executive at Lennar Corp., the sprawling Miami-based builder in 17 states. Baby boomers' children are moving out, prompting their parents to consider ditching the suburban cul-de-sac in favor of active downtown living close to arts and entertainment.

As the boomers gobble up the choicest properties, their Generation X children get pushed into dicier neighborhoods. Mix in low interest rates with sprawling and expensive suburbs and there's even greater market pressure for homes in the city. Add the flood of investors, and you've got froth.

When trying to pick a winner, experts advise assessing a number of things. Start with location, then look at who's moving in. Consider access to public amenities such as transit and parks. Then there's architectural quality and new businesses that cater to new ethnic groups. And don't forget big institutions, such as hospitals and universities.

With the right combination, a neighborhood will soar.

"There's a tipping point. You reach a critical mass," said Alexander von Hoffman, a senior fellow at Harvard's Joint Center for Housing Studies. "Once the neighborhood's upwardly mobile psychology takes hold, that idea gathers momentum and it becomes an unstoppable force."

Goodbye sketchy, hello gentrification.

Making the right pick carries big stakes. Those who bought years ago in Canton, for instance, have seen average home prices in the waterfront neighborhood jump almost 50 percent in the past two years to $246,403, according to Live Baltimore, an independent nonprofit organization that promotes the benefits of living in the city.

But in Middle East, the blighted neighborhood north of Johns Hopkins Hospital, prices fell by a third to $46,373. Hopkins and the city have just begun a massive expansion into the neighborhood with an 80-acre, $1 billion redevelopment effort, displacing 350 families to put in a biotechnology park and 1,200 new or renovated homes.

And like bets that could go either way, there's the neighborhood on the cusp: Reservoir Hill. Prices there doubled from 2002 to 2004, to $140,766. Housing vacancies have plunged as public investment and other initiatives start to pay off, but the neighborhood still has a crime problem. And some say the neighborhood has been on the up-and-coming list for 30 years.

First consideration

The first thing to consider is location, said von Hoffman, author of House by House, Block by Block: The Rebirth of America's Urban Neighborhoods.

Is it close to downtown? Best bets are within a mile or two of a city's center, the traditional hub of jobs, nightlife and urban vitality. Are developers converting former office buildings into lofts or residential space? Is it close to a growing university, hospital or set of institutions? "That's an indication a neighborhood is looking good," he said.

Colleges create jobs by expanding research centers and laboratories, such as University of Maryland's biopark west of downtown along Martin Luther King Jr. Boulevard. The Hopkins expansion in East Baltimore is expected to create 6,000 jobs for education levels ranging from high school to advanced degrees.

Universities also tend to produce graduates who want to stay around the neighborhood.

Could this run out of steam? Probably not.

"You know that the downtown isn't going any place," von Hoffman said. "You know that the university - especially once they reach a certain size - isn't going any place."

Now look at physical traits, such as parks, public transit and housing stock. Is there a new rapid-transit station, which often heralds a neighborhood's ascent? Does the neighborhood have older buildings that were once elegant and handsome - historic, even? If there are abandoned buildings there now, how many were there 10 or 20 years ago? Are there graceful parks that could become magnets?

"The housing stock has to be able to allow renovation or transformation," said Mitchell L. Moss, an urban policy professor at New York University. That means good architecture worth fixing up or buildings that can turn into homes, such as industrial space that can be converted to loft apartments, Moss said.

Who lives there?

Next, consider who lives there. Look for artists, writers, musicians and bohemians, he said. These trendsetters sniff out real estate bargains, and they boost the hip factor of any neighborhood.

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