Neighborhoods don’t breathe or bleed. They aren’t alive in the same sense as we are. Yet they still have a life cycle and it doesn’t necessarily take a real estate expert or economist to decipher what stage of life a neighborhood is in.

Four Stages of Neighborhood Life: 

Growth: A period during which there are gains in public favor and acceptance. Demand increases.

Stability: A period of equilibrium without marked gains or losses. No real obvious change.

Decline:A period of diminishing demand and acceptance.

Renewal:A period of rejuvenation and rebirth of market demand.

When you think of a neighborhood that is in the “growth” stage, it might be a new tract that is the talk of the town or an area where new buyers are just waiting for someone to die out of the subdivision (literally). In contrast, a neighborhood experiencing stability would really be in a place where there is an overarching sense of equilibrium without demand increasing or decreasing. A neighborhood in the stage of decline would likely have characteristics such as unkempt lawns, dilapidated units, maybe increasing crime, and less owner-occupied properties. Lastly, renewal takes place when a neighborhood in decline experiences a renaissance of sorts – for whatever reason, maybe gentrification, political action, a neighborhood association springing to life to bring change, or even governmental stabilization programs directed toward the area. 

When you think about particular places in the Sacramento region, which neighborhoods comes to mind for the categories above? Where would you put Oak Park, Rosemont, Tahoe Park, Rancho Cordova, Los Lagos, Rancho Murieta, Land Park, or wherever you might happen to live? Or a bonus piece of conversation, why do certain areas experience a decline while other areas grow?

* The four stages above were taken from Harrison & Lee “How to Pass Residential Appraisal Certification Exam” (A book I used to pass a big test. These stages show up in any real estate book though).