I just read a Trulia.com Real Estate question asked by a young couple looking to purchase a home. What is the best neighborhood for appreciation? It was regarding the appreciation potential of 2 fantastic “fringe” Philadelphia neighborhoods, Francisville versus Point Breeze.  Since the fringe neighborhoods are my specialty I had to answer.  I said, “It is a tie ! Both are winners for appreciation.”

What I’d like to share with all prospective buyers and future sellers in Philadelphia is that these fringe neighborhoods follow the same Universal Rule in Real Estate:  Location, Location, Location !

Appreciation in the “fringe” areas of Center City Philadelphia neighborhoods have gained a lot of turbo charged momentum from the Real Estate boom a few years ago.  The fringe neighborhoods are those blocks and subdivisions just outside of the Center City Metro Area.  They are largely residential and offer the feel of an “urban village”.  The fringes of Philly have been the location of choice for many people moving back into the city, myself included.  So, a lot of revitalization has been concentrated in, for example, Graduate Hospital and the Art Museum sections.  It is only natural that those neighborhoods influence the values of their surrounding districts. Graduate Hospital has influenced the development of Point Breeze.  The Art Museum has influenced the areas of Francisville and Brewerytown.  Other neighborhoods such as Northern Liberties have influenced Old Kensington as well as Fishtown and Queen Village has influenced Pennsport (just to name a few other examples.)

For buyers purchasing right now and within the next year in these fringe neighborhoods, the 4-5 year plan focused on partaking in some appreciation will work.  Though, the question still remains, how do you choose the right Urban Neighborhood in order to capitalize on appreciation over a 4-5 year time period?  The answer is: You have to do it block by block.

 Here are four suggestions that may help people identify a potentially appreciating area:

1) First, pick a neighborhood close to the border or “fringe” of an established community that you really enjoy.  This fringe neighborhood should offer you an environment you feel is comfortable for you and is within your price range.

2) Once you have chosen a neighborhood, choose the blocks where there are few to no vacant properties.  Those blocks have a jump start on appreciation since they are all occupied and preferably cared for.  Sometimes one well maintained block is like a beacon and can be the inspiration for other buyers to move into the community.

3) Even if there are a few rugged looking homes, look for signs of development on the block.  Typically where one or more investors and homeowners are making big improvements to homes, there are more to come in the near future. It is like a domino effect.

4) Look for proactive neighbors getting involved to keep th streets clean and drug free as well as a strong neighborhood association.  A strong neighborhood association is the life blood of a community.  (Ex. Fishtown Neighborhood Association, Northern Liberties Neighborhood Association…)

I hope that these thoughts, tips and opinions serve to help you understand some of the considerations that can be taken when looking to partake in the appreciation of an urban neighborhood in the Philadelphia fringe.  Please share your own thoughts and experiences in a comment.

Originally Posted on Philadelphia Real Estate Blog