Many down-and-out neighborhood housing markets across the country are on the rebound thanks to a confluence of market forces working in their favor. Tight inventory of homes for sale combined with a dearth of new homebuilding is convincing buyers and investors to reconsider buying in what they once might have considered “bad” neighborhoods.
RealtyTrac (now an ATTOM Data Solutions company) analyzed housing market and neighborhood quality data in 3,561 U.S. zip codes with a combined population of 124 million to select the 35 best “bad” neighborhoods to buy a home.
“The underperforming school scores and inflated rates of underwater homes in these markets demonstrates they are lagging the housing recovery seen across much of the rest of the nation,” said Daren Blomquist, senior vice president ATTOM Data Solutions. “But it is clearly evident from this data that many individuals and institutions are betting on these hyperlocal housing markets to still bounce back. Home flipping returns are substantially above the national average, indicating strong buyer demand for fixed-up homes; construction loans are increasing, indicating increased development often at a large scale; and the share of millennial population is increasing, indicating that the pool of new renters and homebuyers is growing.”
RealtyTrac (an ATTOM Data Solutions Company) analyzed 3,561 zip codes nationwide with a combined population of more than 124 million people and sufficient data on construction loans, home flips, school scores, share of underwater homes (all from the ATTOM Data Warehouse), and the millennial share of population from the U.S. Census bureau. To make the final cut of Top 35 Best Bad Neighborhoods to Buy a Home, zip codes had to have a population of at least 2,500, an increase in the number of construction loans over the past 12 months, an average home flipping gross return of at least 60 percent, with millennials (born between 1984 and 2000) representing at least 25 percent of the total population and increasing in share of population from 2013 to 2014. Additionally, the zip code’s highest scoring elementary school needed to be below the state average in 2015, and the share of underwater homes in the zip code needed to be at least 15 percent — above the national average.