Real Estate Trends: Life Cycles of Neighborhoods

Real Estate

Did you know that neighborhoods have identifiable life cycles?

Chart - labeled


There are actually four life cycles that neighborhoods transition through: Growth, stability, decline, and revitalization or land use change/abandonment.  


It’s good to keep these in mind when you are searching for your next home because you might not want to invest in a home that resides in a neighborhood that is in the declining cycle.


How can you tell what stage a neighborhood is in?


Good Question!  Let’s take a look at some tell tale signs.


Growth: When a neighborhood is in the growth phase it tends to be a newer neighborhood where there is active construction of houses, schools, shopping, and roads.  This phase tends to be rapid.


House with moving truck


** The growth phase tends to be a good time to invest.


Stability: When the new construction stops due to the depletion of vacant land or the lack of profitability in building, the neighborhood will enter the stability phase.  This tends to be a longer cycle and can be recognized by maturing landscape, and the rate of home sales decreasing to a normal neighborhood turnover rate.




** The stability phase tends to be a safe time to invest especially if you plan on staying in the home for a while. 


Decline: A sure sign of a neighborhood in decline is poor maintenance on homes and improvements.  Streets and sidewalks may start to crack and show their age. Some landscaping may start to appear overgrown.  Additionally, the neighborhood loses market interest and, therefore, property values may see stagnation or decline.


Old house


** Probably best not to purchase in a neighborhood that is in the declining phase if you are seeking the best appreciation rate. 


** Some of the most rapidly declining neighborhoods may be due to jobs leaving an area or the neighborhood turning into rentals while entry-level home-buyers move to the next bigger home.  However, they could also be due to older-style architecture, an aging population, or the intrusion of an industry that detracts from the desirability of a neighborhood.


Revitalization: A neighborhood may go through a revitalization phase when sparked by new employment opportunities or the revitalization of the urban areas and conveniences.  At this point, neighborhoods may experience a rebirth and new growth phase.  You’ll know a neighborhood is in the revitalization phase when lots of homes are being sold, bought, and fixed up and then the neighborhood becomes competitive again. 


Renovation          Cleaning up the yard


** Revitalization tends to be a good time to invest in a neighborhood.


Sometimes a neighborhood will not enter a revitalization phase, but instead enter an abandonment phase or a phase where the land use is changed.


One this is for sure, just like with life, change is a constant in real estate!


One of the areas near Vancouver, Washington seeing an abundance of growth is Ridgefield, Washington! Check it out! 



If you would like to discuss your neighborhood or go shopping to find your next neighborhood, just shoot us an email and we’ll get your treasure hunt started!


Also, be sure to check out our Market Insider page on our website so you can monitor what’s happening where you are or where you want to be!


Ron and Sherry Patterson