What’s the latest hipster trend? According to one real estate company, it’s profiting from the housing markets in their havens.
Real estate investors saw substantial returns after flipping homes in hipster-friendly areas last year, according to RealtyTrac, a real estate information site that tracks foreclosures and defaulted properties.
The California-based company analyzed zip codes with high incidence of home flips — property sold twice in 12 months — that also met criteria it deemed important to the trendy demographic: percentage of young people in the population, and accessibility to public transportation.
Each zip code in the ranking had: at least 10 homes flipped in 2015; an average return on investment of at least 50%; a boost in population from 2013 to 2014; at least 25% of the population between the ages of 20 and 34; and at least 20% of the inhabitants walk or use public transportation to get to work. They arrived at the list based on census data and their own findings.
There are several ways to deem which zip codes were the most profitable, but for the sake of convenience, FORBES has ranked them by median gross profit.
Although the list’s target demographic skews young, it’s probably worth pointing out that Millennials as a whole are putting off buying homes. People under the age of 35 made up just 34.8% of American homeowners in the second quarter of 2015. Analysis by real estate site Zillow in 2014 suggested that the reason that generation lags behind in homeownership is because they are putting off marriage, and thus the benefit of dual income streams.
Here’s how the cities break down by zip code:
- Berkeley, CA 94702
- Los Angeles, CA 90029
- Seattle, WA 98115
- Washington, DC 20002
- Oakland, CA 94601
- Newark, NJ 07104
- Hyattsville, MD 20782
- Oakland, CA 94606
- Raleigh, NC 27601; The neighborhoods in Downtown Raleigh have undergone revitalization in recent years, and zip code 27601 looks like it might be part of the trend. The area saw an astonishing 230.3% average ROI for the 14 home flips that occurred in 2015, the second-highest ROI on RealtyTrac’s ranking. The zip code had a median profit of $178,500 last year.
- Chicago, IL 60611