How to Predict the Next Hot Hood

Wells outlines some of the signs for how "the aspiring urban homeowner or real-estate investor can find a neighborhood that is truly turning into a more livable place where housing values will rise over the long term—not just an overhyped area with no staying power."

Indicators of areas on the rise include proximity to other popular neighborhoods; the arrival of higher-end retail; attractive, often older, housing stock; and healthy employment data.