These are predicted to be some of the hottest Boston neighborhoods in 2016
Using home value forecasting, Zillow announced predictions for the Boston neighborhoods with the most potential for growth.
If you live in East Boston, expect your home’s value to go up this year.
That’s the word from Zillow, which announced its predictions for the Boston neighborhoods that would see the most home value growth over the next 12 months.
Increasing home value “is a proxy for figuring out where demand lies,’’ Zillow Chief Economist Dr. Svenja Gudell told Boston.com. Or it can show where supply is not yet high enough.
Zillow predicts East Boston will have the highest home value growth this year at 4.9 percent. North Dorchester followed close behind with a predicted 4.5 percent growth in home value, and North Harvard in Cambridge came after that with a forecasted 4.2 percent growth.
The South End and Downtown Boston followed with predicted 3.9 and 3.8 percent home value growth, respectively.
“East Boston had a heavy immigrants population and now [there are more] younger professionals and students,’’ Gudell said. “We often have to refer to this as the ‘halo effect.’’’
She defined the “halo effect,’’ as the pattern that occurs when neighborhoods start getting really expensive in a city’s center, and so people spread out to the city’s outer rings where housing prices haven’t spiked yet.
“These people are searching for something more affordable than living in Beacon Hill and Back Bay,’’ Gudell said. “They still want neighborhoods that feel urban, have fantastic restaurants, and are walkable, but are not as expensive.’’
Okay, so what about the South End and Downtown, two already expensive neighborhoods?
Gudell noted that these neighborhoods are already hot (and are probably slowing down a little bit), but there is still a high demand for homes and a short supply.
“We are seeing buildings go up but a lot of them are high-end condos and luxury condos,’’ she said. “But [for] folks that are trying to rent in the middle of the spectrum or below, there is not a lot of new construction going on.’’
She said that North Harvard is probably having a similar “halo effect,’’ as home values directly in Harvard Square are already very high.
“We are seeing this type of behavior in cities across the country,’’ Gudell mentioned. “People are in search of affordability and having to move out.’’
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