As an example: "New England, led mainly by Boston, nabbed 14.6 percent of all 2011 angel investments." - huffington post This tells you Boston has a thriving business community. In addition Google announced it's expansion in Cambridge ... My guess is Google's presence their over the last several years has accounted for it's 10% increase in property values since 2005.
Hope that helps!
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Back Bay http://goo.gl/EYIVf
South End http://goo.gl/txiu6
Beacon Hill http://goo.gl/N4k7E
Another area to consider:
The main contributing factor for neighborhoods to appreciate is the local economy: commercial offices, retail, restaurants, etc.
In Boston, our prices peaked (according to Case Schiller) in 2005. The city realized a 2nd peak in 2008 and then prices quickly fell after Lehman Brothers went belly up.
We have seen a strong rebounding trend and prices have regained their 2008 levels and in some areas (Cambridge and South End) have exceeded those levels by 3-5%.
An equally important question to ask would be " which areas are likely not to depreciate?" The core downtown markets: Back Bay, Beacon Hill and South End along with Jamaica Plain and Cambridge have showed remarkable resiliency .
It is likely no coincidence that those areas are experience the strongest activity in our Boston marketplace.
It's not generally a good idea to buy a single family home or condo with the idea of trying to make a profit in 5 years. When you figure in financing costs, maintenance and sales commissions you'll need about 10% appreciation just to break even. It's a little different if you're buying a fixer upper and want to put in some sweat equity. In most cases you should buy a home because it's somewhere you want to live, and look on capital appreciation as a bonus.
For condos, multi family and investment property stay near the T, preferably the Red Line from Boston north to Arlington, or near a respected college. The Somerville Green Line expansion through Union Sq and Winter Hill is expected to raise values in the neighborhoods near the proposed stations. I wouldn't want to gamble on this being completed in 5 years, though.
A rising tide raises all ships, so it could easily happen that as the market improves many towns experience increasing values. From an investment point of view, however, the safest bet is to stick to the areas I just described.
A good buyer agent who's familiar with investment strategies can help you tremendously. Don't forget, the profit is made when you buy, not when you sell.