When newcomers move into low-income neighborhoods and begin rehabbing homes, it can prompt a much-needed rush of investment into the community. But with gentrification comes higher home prices—and the possibility that long-term residents will be priced out of the market.
Gentrification isn't without controversy, but it has transformed many cities such as New York and San Francisco. Realtor.com® notes that gentrification can be a double-edged sword for home buyers who may initially find opportunities to purchase cheaper properties but might have to wait for change to take root in the community. “Neighborhoods that are well-located, with public services and transportation that were originally built for the middle class, are the ones more likely to be gentrified,” Phillip Clay, author of Neighborhood Renewal: Middle-Class Resettlement and Incumbent Upgrading in American Neighborhoods, told realtor.com®.
Many of the fastest-gentrifying neighborhoods are secondary markets within larger cities. They tend to be lined with affordable, historic homes and located near higher priced urban hot spots, realtor.com® notes. But “for longtime residents, the only people who are winners are those who are in a position of cashing out,” Clay says.
Realtor.com® researchers uncovered the fastest-gentrifying neighborhoods by looking at lower-income ZIP codes in the nation’s 100 largest cities. From 2012 to 2017, they factored in change in median household income, home sales, and list prices, among other criteria. They also limited their rankings to one ZIP code per city for geographic diversity. The fastest-gentrifying neighborhoods, according to the study, are:
1. Rivertown, Mich. (Detroit)
- ZIP code: 48207
- Median list price: $193,000
- Five-year median sale price change: +526.4%
- Five-year median household income change: +17.5%
2. Little Haiti-Liberty City, Fla. (Miami)
- ZIP code: 33127
- Median list price: $375,100
- Five-year median sale price change: +205.9%
- Five-year median household income change: +23.6%
3. Lockwood, N.C. (Charlotte)
- ZIP code: 28206
- Median list price: $280,000
- Five-year median sale price change: +100.9%
- Five-year median household income change: +28.5%
4. Johnston Terrace, Texas (Austin)
- ZIP code: 78721
- Median list price: $424,000
- Five-year median sale price change: +148.2%
- Five-year median household income change: +29.5%
5. Patterson Green, N.C. (Raleigh)
- ZIP code: 27601
- Median list price: $450,000
- Five-year median sale price change: +58.5%
- Five-year median household income change: +57.4%
6. Uptown, Calif. (Oakland)
- ZIP code: 94612
- Median list price: $695,100
- Five-year median sale price change: +128.2%
- Five-year median household income change: +63%
7. Encanto Village, Ariz. (Phoenix)
- ZIP code: 85006
- Median list price: $315,100
- 5-year median sale price change: +98.3%
- 5-year median household income change: +53.1%
Source: “America’s 10 Fastest-Gentrifying Neighborhoods: Buy While You Can,” realtor.com® (April 15, 2019)
