Based on data from the Zillow real estate service, top business journal rates Pico Union one of 10 fastest growing neighborhoods in big cities in the country.

By Leslie Evans

Evidence of the revitalization of Los Angeles Downtown and the once-depressed communities to its immediate west and south, the March 6 Business Week rates Pico Union one of the 10 fastest appreciating and best buys in the country, with Jefferson Park a close runnerup. The study was conducted by online real estate specialist Zillow.com. The criteria was rapid increase in home price but still below the median price for the metropolitan area. Pico Union, which stands between Downtown and West Adams, has jumped from a fourth quarter 2001 median home price of $129,621 to $516,498 in the fourth quarter of 2006, a 298.47% increase in five years. It is still a bargain

Business Week writer Maya Roney presents her 10 choices as neighborhoods "that offer the best quality of life along with strong investment potential." She points to real improvements in these communities aside from the general inflation of house prices. "Factors such as schools, improved crime rates, high employment and access to public transportation make these neighborhoods increasingly appealing to price-sensitive buyers."

The top 10 in the country are marked by "both relatively affordable housing and a recent history of significant appreciation. Though identifying undervalued and undiscovered areas is far from an exact science, these neighborhoods have what it takes to become solid investments -- and places to live." Up and coming but still bargains compared to much of the rest of the city. Here is Business Week's take on Pico Union:

"Several years back, the working-class immigrant neighborhood of Pico Union in downtown Los Angeles was one of the poorest parts of the city. The median home value in the fourth quarter of 2001 was $129,621, according to Zillow. Today, 500-square-foot condominiums are selling in the $300,000s, according to Stephen May, a real estate broker and condo specialist at L.A.'s Downtown Residential Realty. And that's the low end -- $4 million penthouses aren't an unusual find in this rapidly gentrifying neighborhood.

"'There's a boom going on downtown,' May says. 'Homes are now available in any price range.' Of course, not everyone is benefiting from the rise in prices in Pico Union. The traditional low-income immigrant community, largely from El Salvador, is being forced out of the neighborhood by rising rents and the bulldozing of old buildings. According to Zillow's estimates, home values in Pico Union have soared almost 300% in the past five years, to a median home value of $516,498. But in Los Angeles, where the median home value is nearly $600,000, Pico Union remains a steal for many buyers."

Business Week acknowledges the higher crime rates of the inner city, but says this is more than offset by the advantages: "They have become increasingly appealing to affluent professionals looking for transportation hubs, pedestrian accessibility and an urban social scene. Artists and so-called hipsters may also sacrifice a little space and safety for a cheaper home in a diverse and creative area."

The table below lists the top 10.