What is a Neighborhood Life Cycle?

Neighborhoods change as they go through a typical life-cycle process.

1. They are built.

When they are first building out, neighborhoods experience a phase of rapid expansion.  Families–often newly married couples–move in, they have children, the household size increases, and services such as schools, grocery stores and other facilities are built to accommodate their needs.  Think of this as the baby phase. Everything looks shiny and new.  The neighborhood is full of possibility

3. They stabilize.

After this initial period of growth neighborhoods tend to stabilize for a period of time. Think of this as the toddler through adolescent phase. The neighborhood is growing up.  Once naked lawns are landscaped, pools are built, trees have been planted and may even be big enough to climb.  Most importantly a personality is being developed.  Is this a sleepier neighborhood, the best place to find a restaurant, one that welcomes immigrants, or a more homogeneous area?

4. The decision.

Up until this point the neighborhood has been going along pretty much in an established pattern.  Think of a child going to school all the way up to graduation from high school. At this point some number of decisions need to be made.  Is the child going to college, if so is it nearby or not?  Is the child going to go directly into the work force or maybe the military?

Neighborhoods also go through decisions as they age.  Houses get older, they need maintenance or renovation, the trees need to be pruned or replanted, the once shiny new equipment in the playground needs to be updated.  When a homeowner decides not to repaint, the neighborhood changes; when a homeowner decides to add a garage or a pool to his property, the neighborhood changes; when graffiti appears, and no one calls the authorities to get it cleaned up, the neighborhood changes; and when people vote for specific local politicians over other, the neighborhood changes. In hundreds of ways, day after day, residents’ decisions shape the changing face of the neighborhood.

5. The “Slump”

The slump is normal in most neighborhoods and in most life stories as well.  In people it is characterized by the thoughts similar to “What have I accomplished?” or “Is this all there is?”.  In neighborhoods it is characterized by a decreasing population, being outdated or old fashioned amenities, and and the need for major maintenance.  The slump is real, it will happen and that just needs to be accepted.  What is important is what happens next.

6. The Three Scenarios.

They are only three things that can happen at this point.  Undesirable economic and social conditions may make the neighborhood unattractive, resulting in population losses. New in-migration from young families may occur as older couples leave, maintaining a stable neighborhood population. Lastly a neighborhood may be revitalized or experience a major change in character if there is a large turnover in the types of people living there or the kinds of local businesses.

Knowing where in the cycle a neighborhood is should be considered when liking for a new home as well as when selling.

More information about this can be found here and here.

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