According to recent statistics from the U.S. Census Bureau, 66.9% of all households in the U.S. live in owner-occupied housing. For most Americans, this is our largest purchase and it requires a well-thought-out plan. Here are five questions to ask yourself before you buy real estate in an up-and-coming market.
1. What is the local public school’s reputation and performance?
Even if you don’t have school-aged children, find out how long the principal has been there and how much turnover there is with the school’s administrative team. Find out if there is an active Parent-Teacher Association at your neighborhood school. If a school’s community is strong, the real estate value is likely to hold up.
2. Are locals working to make the neighborhood better?
Research neighborhood activity. Are there (unpaid) locals who give their time and energy to underwriting grants for beautifying their developing neighborhood?
When you Google the town/neighborhood, do you see evidence of artists donating time and talent to paint murals? Or citizens who want to work in public, communal gardens?
What local businesses are there? Are there block parties or festivals? The stronger the sense of community, the more house value will hold up.
3. What public infrastructure plans have been announced?
Research zoning plans. If a highway is planned to go through the middle of your town, that paperwork has to be made public. Subway line extensions or public transport line extensions potentially raise the value of a new town/neighborhood.
4. Walk around the area during the day and at night. How do you feel?
How much crime is in the area? You can get statistics from the local police precinct.
5. How much cash can you can put down?
As with any investment, your time horizon and investment goals are good to keep in mind. Know how long you plan to stay in the property. Know how much cash you can put down and still comfortably make payments, which include the mortgage, property tax, home/fire/flood insurance and a slush fund for home maintenance. If you lost your job, could you still afford this home?
FOX Business Network's Deirdre Bolton will interview real-estate mogul Doug Shorenstein in San Francisco about the U.S. housing market on Monday, Sept. 29.