Investing in city real estate

Here’s a very interesting article on how cheaper neighborhoods in big cities can make better investments than posh neigborhoods. Some examples include LA:

One might think that the bulk of that appreciation came in wealthy and well-known enclaves like Beverly Hills or Bel-Air. But according to a ZIP code analysis, within the Watts ZIP of 90059, home prices rose 91.9%; more than any other ZIP in Los Angeles. Meanwhile, had you sunk your funds into the upscale neighborhood of Holmby Hills, you would have the least amount of appreciation in the city–under 9% from 2003 through 2005.

Also, check out Miami, Philadelphia, and New York:

For investment performance, think Miami’s Little Havana, where prices increased more than 150% over the last two years. Or the tough Northern Liberties section of Philadelphia, which went up 70%. Or Manhattan’s Lower East Side, where tenements that once sheltered struggling immigrants are now occupied by high-priced lawyers, and the median home price is more than $650,000, according to real estate appraisal and consulting firm Miller Samuel.

Dallas and Minneapolis-St. Paul buck the trend – these cities still see pricier neighborhoods appreciating more quickly.

At the end of the article I linked to, theres a link to a slideshow that mentions 20 neigborhoods that would be good places (according to Forbes) to buy a home.

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