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Filtering Down

By on November 16, 2019

Filtering down refers to the organic process where housing units previously occupied by high-income households gradually deteriorate and becomes available to occupants with lower income.

This is typically gradual process influenced by various macro and micro factors.

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A middle-income family might have lived in a neighborhood, and might have even spent a lot of money on remodeling and installing high-end fixtures.

But over time, they relocated for one reason or another. And most of the families in the neighborhood have done the same.

Common reasons for relocation might be:

  • They became wealthier and bought a better home
  • Pollution in the area
  • Increase in crime in the area
  • Work commitments make relocation necessary
  • etc

Whatever the case, the filtering down process enables lower income groups to inhabit the properties which were once considered upmarket.

Real estate investors might sometimes find great fixer-upper opportunities with these properties.



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