When you’re ready to buy your dream home, you’re committing to living in one location for a while. A great way to find out what it’s like to live somewhere before you commit is doing a little research about the neighborhood you’re interested in.
For example, reading reviews of residents who have shared their firsthand experiences of living in their neighborhoods will help you determine whether the zip code you’re interested in is the right fit for you and your family live in.
So, before you put your money on the line, take a peek around the neighborhood. We won’t use a certain cliché, but there is a reason the pros emphasize location when buying real estate. You can change your house—but you can’t change the neighborhood. And if your neighborhood is on the decline, you just might have a hard time if you decide to sell in the future.
A bad neighborhood isn’t always obvious, though; sometimes you need to do a little digging to know if a community is worth buying in. Luckily, we’ve identified seven issues that should give you pause before you sign on the dotted line.
Issue No.1: Too many houses are on the market.
There’s nothing wrong with two or three listed houses on the same street. But if you see an army of “For Sale” signs, consider looking elsewhere.
“This points to illiquidity in the market and pricing pressure, which is a risk for buyers,” says Alison Bernstein, the founder of Suburban Jungle, which helps families find their ideal suburb.
Of course, the hue of this particular red flag depends on the reason for those “For Sale” signs. Perhaps the neighborhood is rapidly gentrifying and longtime residents have decided to cash in. Maybe there are many older residents who are downsizing. Or maybe there’s a more sinister explanation, like increasing crime rates. Do your homework to assess the situation before making any big moves.
Issue No.2: The schools are enrolling fewer students.
Schools in healthy communities should be steadily increasing their enrollment—or at least keeping the population steady, if there’s no physical room to grow.
“Shrinking class sizes are a red flag,” Bernstein says.
There are a number of reasons enrollment might decrease. Your local school might have a reputation for poor management, sending parents fleeing to charter or private options. Or perhaps residents are staying put as their kids grow up, leading to older neighbors and fewer close-by pals for your kids. That may or may not be a deal breaker, but it’s certainly something to consider.
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Issue No.3: The area leans industrial.
A nearby strip of cute boutique stores might be a nice selling point but reconsider the purchase if the closest commercial influences lean toward the industrial.
“Be mindful of any kind of commercial influence on the block, such as close gas stations or anything that could be undesirable health-wise,” says Ralph DiBugnara, the vice president at Residential Home Funding.
Any nearby industrial plants should automatically nix a neighborhood, and think long and hard before buying across from a car dealership or auto body shop, which attract a lot of car traffic.
Issue No.4: There are lots of empty storefronts.
Don’t just stop at counting boutiques versus gas stations. Are the stores actually thriving, or are there lots of retail spaces for rent?
“Empty storefronts can tell you a lot,” Bernstein says. “They point to less disposable income of residents than clearly there once was.”
Why does that matter? Decreased disposable income indicates a neighborhood on the decline. If homeowners don’t have money for dinner out, they probably don’t have cash for upkeep. Shabby homes drag down property values. Meager cash flow can also lead to future foreclosures—and a foreclosed-upon home is a neighbor that no one wants.
Issue No. 5: The Stepford style is in full force.
You might love the homogenous, well-groomed suburban look (and there’s nothing wrong with that!). But take a moment to examine it more closely. Are there any unique decorative doodads dotting each garden, like aluminum chickens or wind chimes? Or is the front porch furniture identical?
If all the neighborhood’s homes (and landscaping) look suspiciously similar, “explore how restrictive the homeowners association is,” says Susanna Haynie, a Realtor in Colorado Springs, Co. “It could be an issue.”
Issue No.6: There’s no parking.
Sure, the property may have a one-car garage—but where will your friends park, and where can you keep your spouse’s car? If the streets have bumper-to-bumper traffic, think twice about buying in the neighborhood—especially if the home lacks a garage or carport.
“I’m always on the lookout for a lack of parking,” DiBugnara say. “It’s best to visit at night or on weekends to really, truly tell what will be available to you once you live there.”
Unless you commute primarily by foot or bike—or you’re OK spending your weekends circling the block—the neighborhood may not be a good fit for you.
Issue No.7: Surrounding homes aren’t well-maintained.
A street in shambles might seem like an obvious red flag. But you also might have heard that buying the best house in the worst neighborhood is a prime opportunity for profit.
Tread lightly here: A street full of run-down homes with overgrown yards and broken fences should set off warning signals. And this has nothing to do with wealth; lower-income neighborhoods can be just as well-kept as more expensive ones. It’s about pride. Neighbors with no pride in their home’s appearance and upkeep decrease property values for everyone.
Plus, problems with the homes next door can indicate that the house you want might have bigger issues than meet the eye. Look at every house on the block for issues such as water pooling in the yards, or flickering porch lights. “If there are problems such as water pipes or electrical issues, you will tend to see more than one home showing damage,” DiBugnara says. Fixing these major problems “could be a major expense, hassle, or detriment to your value later on.”
Finally, experts suggest visiting a neighborhood at different times of the day to get a realistic sense of the community and to commute to work from the home during the morning to get a sense of normal traffic. Visiting a home in the afternoon and evening also helps you learn about the area and if there are problems with noise or traffic.
"Check with the police and ask for a local crime report—learn everything you can about the area,” suggests Walter Molony, spokesperson for the National Association of Realtors.
Below is a standard “Road Map” that explains the typical process for buyers to close on a new home. Of course, there can be many variables along the way, but this gives a good run-down of what to expect from a typical transaction.
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