There are many Denver neighborhoods in the midst of transition. I'd like to take some time and highlight a few of these that I find interesting, and different, and full of opportunity. These neighborhoods are changing for various reasons, some are seeing populations shifting from well-established families to working singles and two-income up-and-coming couples. Others are coming out of dormancy as small businesses re-open vacant storefronts and create pedestrian-friendly shopping within residential enclaves. Whatever the reasons behind the changes, the home values in these neighborhoods is increasing or poised to increase in the coming years.
Skyland
Skyland is a relatively small neighborhood bordered by Martin Luther King Boulevard to the north and East 23rd Avenue to the south. Colorado Boulevard creates its eastern border and York Street its western. Recently, Skyland has enjoyed a renewed popularity among young professionals and upwardly mobile families. This change in population is increasing home values as these modest, mid-century, brick homes are being purchased and renovated with the amenities that Generations X and Y demand in their living spaces.
One draw for many homeowners new to the area is the proximity of a vast public open space to the south. With the combination of City Park, the Denver Zoo complex, and the City Park Golf Course, new residents can enjoy jogging around the golf course and into City Park proper, taking the kids for a stroll around the fountains in the park, riding almost three miles of paved and satisfyingly uncrowded bicycle routes in the park, and the various events (including Jazz in the Park) that go on in City Park throughout the summer months.
As Skyland, and neighborhoods like it, see changes in population and improvements to existing homes, there exists the possibilities of pocketing generous sums of money for savvy real estate investors and those homeowners motivated and in a position to sell. But at the same time there is the very real risk of becoming overextended by showy, but owner-specific renovations in the pursuit of higher profit at the time of sale, only to find out that not everyone wants a basement master suite or a garage to home theater conversion. The best advice I could give is to buy a home that you would want to live in for the forseeable future because, chances are, if you would want to live there, in a comfortable space, so would potential buyers. The other advantage to a buy-and-hold strategy is that you will be able to ride out temporary market fluctuations, no matter their length, and wait for the optimal time to sell.
There is research that shows that mixed-income communities are stronger, more stable and less likely to suffer from wide swings in home valuation. Additionally, businesses often balk at investing in strictly low-income areas because of real or perceived lack of purchasing power. Similarly, wealthy neighborhoods tend to shy away from the expansion of businesses and services in their neighborhood because of the change it may bring to the flavor of their exclusive community and this can result in a stagnation of the neighborhood. One could argue that something like this has been occurring in the Cherry Creek neighborhood over the past decade as younger professionals have avoided this neighborhood in favor of the more diverse Highlands and Baker neighborhoods.
Buying property in Skyland could pay off in the long term. This is because there exists a fundamental difference between what makes a smart real estate investment in the short term and what makes the kind of community where people want to live. Over the long term however, the differences in home values can make up for any short term profiteering. Buying a property as a cash-flow investment requires a different set of rules and standards than buying a home to live in for a period of years. A cash-flow investment might generate a few hundred dollars per month, but will likely not appreciate significantly in value over time while a home purchased in a desirable neighborhood will likely produce a fine sum, which may be exempt from income tax, upon the sale of the property.
There are many reasons why Skyland is a good neighborhood in which to purchase a home; the proximity to open space, popular restaurants, eclectic cafés, and neighborhood bars, a variety of unique shops; the nearness of downtown; the closeness of museums and cultural activities; ease of access to public transportation, Denver International Airport and the interstate highway system; and the solidity of the housing options offered in the neighborhood. All of these reasons make Skyland a neighborhood to give a closer look if you are in the market for a home in Denver.
