Neighborhoods change and evolve over time. People move in, people move out, families are raised and businesses are launched over the course of decades, even centuries. Areas of a town that were once considered high-end and wealthy can become crime-ridden. And vice-versa: The block that was once populated by a rough crowd is now the home to adorable bungalows people get into bidding wars over.
Obviously, no one wants to move into a bad neighborhood. But what if the neighborhood turns bad after you’ve bought your house? There’s no guarantee, after all, that things will stay the same after you move in—quite the opposite, in fact, because everyone around you is making decisions that have nothing (directly) to do with your happiness or your property values. If you pay attention, however, you can spot some early signs that your neighborhood is in decline and either do something about it—or think about selling your house before property values start (or continue to) drop.
Housing changes
Some of the earliest signs of a neighborhood in decline have to do with the houses around you:
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Increased rentals. When your neighbors start putting out “For Rent” signs instead of selling their home, it’s usually a bad sign. A higher concentration of renters in a neighborhood pulls down property values in general, and indicates that your neighbors are having a hard time selling, which might indicate that word is spreading that your block isn’t an attractive choice.
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Longer vacancies. Are you seeing properties sit unoccupied for long periods of time? In neighborhoods that people want to live in, houses and apartments sell fast. In neighborhoods that are low on everyone’s list of desirable spots, places sit empty. Vacancy rates can be a solid indicator of the health of your neighborhood.
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No maintenance. Look at the houses around yours—are they maintained? Are the yards mowed, the doors painted, the repairs done? If not, it could be a sign that things are sliding, either due to property values dropping (making maintenance costs unattractive) or because the people moving in just don’t care.
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Higher taxes. Are your property taxes rising every year, but nothing seems to improve around you? It could indicate that local businesses are fleeing (see below) and your local government is trying to make up the revenue shortfall—a vicious cycle that doesn’t bode well for your neighborhood.
Quality of life
There are also day-to-day signs that things are heading south around your way:
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More police. If you’re seeing a lot of cop cars patrolling the area, you might think that’s a good thing. But the police go where they’re needed, so a sudden uptick in police presence might indicate that there are more petty crimes being committed in your neighborhood—which could be the leading edge of a steep decline.
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Less public transit. If your local public transportation has been noticeably reduced—fewer buses, and stations and stops left in disrepair—it might indicate that your neighborhood is no longer seen as worth the investment.
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School quality. Schools are a big motivating factor when families choose where to live. If the schools in your area are overcrowded, underfunded, or otherwise troubled, people with kids or planning to have kids will go elsewhere.
Business changes
Finally, pay attention to the businesses in your general area. Whether you have an old-school main drag lined with stores, a local mall, or just a bunch of small businesses peppered all around, look for:
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Fewer businesses. If the charming stores, restaurants, and tradespeople you frequented once upon a time have closed up and no one has taken their place, that should be concerning.
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Chains moving away. You might not take much notice if a local chain restaurant moves to a different area, but it’s not a good sign—it usually means the chain wants to maintain a presence in your general area, but doesn’t see your neighborhood as a good investment anymore.
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Loss of premium grocery stores. There is absolutely a hierarchy of grocery stores in this country—Trader Joe’s or Whole Foods are usually found in expensive, affluent neighborhoods, while less desirable neighborhoods might have a dollar store of some sort serving as their source for groceries—or no store at all. If you notice your local grocery store has changed hands and suddenly the produce is worse and the prices higher, you may have slipped down the grocery ladder—a clear sign that your neighborhood is on its way down, too.
Seeing these signs of a neighborhood in decline doesn’t mean you should panic and sell your house immediately—but it does mean you should start thinking about your next steps.
