Denver Real Estate: Using the Barbell Theory to Predict Hot New Neighborhoods

In the late 1990s and early 00s, Denver experienced a tremendous population boom. The area had a rapidly developing economy, an educated workforce, and environmental leanings. These qualities attracted scores of people, but soon it seemed Denver was too full, had grown too quickly.

Public projects began. New roads and highways; bigger and urban-centered public parks; diverse, affordable, and exclusive real estate beckoned new buyers. For a time the population crunch was quelled. Denver continued on its successful trajectory. It was recognized (and still is) as one of the best cities in the country.

Then the subprime mortgage crisis hit, and with it the economic recessionsuddenly each of the citys public projects, which were largely financed through taxpayers dollars, scrambled for adequate funding and direction.

Denver stayed afloat. It harnessed the innovation and perseverance of its population and maintained an economic balance. But there were still victims.

The real estate market, which lives and breathes on the publics economic mindset, was in trouble. Hundreds of new projects were close to completion, or already completed, and yet buyers were hesitant, preparing more for their financial survival than real estate investments.

The Denver Post recently ran an article that took a closer look at this practice.

Broker Paul Tamburello of Distinctive Properties has spent years working in the Lower Highland neighborhood east of Federal Boulevard between downtown and the West Highland area near 32nd Avenue and Lowell Boulevard. He subscribes to what is known as the "barbell theory."

"You want to look at the area between two ends of a barbell," he said. "West Highland had already gentrified and was doing well, and Riverfront was about to explode onto the scene."

He also suggests looking at where artists and the gay population are concentrating: "They tend to take more risks and are willing to go into neighborhoods that are emerging."

The article also mentions that distressed propertyin neighborhoods with homes that are largely owner-occupiedis something to look for. When the prices of houses hit bottom, owners will improve their property. This drives prices back up.

Its also recommended to look for neighborhoods with signs of development. This is an indicator that something is happening. More than likely, people will be curious about the projects. This stirs interest and popularity.