Pick any city in America. Doesn’t matter which one. Do you remember the time when NO ONE wanted to live in the inner city? You know, the areas near and around downtown wherever. Well, it looks like times have changed and here in Raleigh, NC “da hood” is one of the hottest real estate markets around the city. Buyers have been lining up waiting to buy some of the most exclusive real estate around town. However, buying in one of these neighborhoods come with a price. Not just the financial price paid by the buyer who moves in but also the price paid by the occupants who once lived there.
There’s no doubting the trend that has been going on over the past five to six years of buyers flocking back to the urban markets in order to enjoy the convenience of downtown urban living. Being able to ride your bike to work, walk to the nearby diner, or even enjoy the weekend festivities has sparked the interest of numerous urbanites with cash to the hood where low income residents once called home.
It was only five years ago, in Raleigh, where many people wouldn’t dare consider living on streets like Bloodworth or Lenoir. When you walked down the street you would find yards in poor condition, homes with sunk in roofs, and a heavy police presence. But at some point a few savvy real estate investors noticed that the climate was changing and there were a large number of people looking to buy homes, not in the suburbs like many of their parents, but in and around downtown markets.
The investors who have, and are still taking advantage of these opportunities, would offer the owners fair market value for many of theses homes that have been primarily Section 8 (affordable housing) rentals and then renovate the home and put it back on the market for sale at a higher price. In turn, a buyer would come along who could afford the new price and purchase the real estate. This trend would continue house by house, block by block, until the neighborhood began to look far different than what it did just a year prior in more ways than one.
The buyers moving in pay the new comparable prices and get the great location near the amenities while the former residents moving out suddenly find themselves having to find a new place to live with few options on the table. It turns out that sometimes one person’s opportunity is another’s misfortune.
To be fair, in America we have tenant laws which prevents owners from selling a property during the time of a tenant’s lease then suddenly raising the rate to unjustifiable levels or even kicking a tenant out during the process of selling. However, private property rights also give owners the freedom to sell their home when they choose at a price they believe to be fair. So there’s nothing illegal about an owner selling their property for profit and there’s nothing wrong with a new owner fixing up a property and selling for more to a buyer who is willing to pay the asking price. But the sudden popularity of the hood among buyers is simply the reality of how markets can change.
This trend likely won’t subside anytime soon. Homes located in hoods near or inside urban markets will continue to be the popular place to live until the next wave comes along and buyers decide to take that ride.