Every neighborhood, whether urban or suburban, passes through several phases in its life cycle.

Early warning signs foretell a neighborhood's period of decline. The population may consist of high percentages of unskilled workers or workers representing only one industry. Another sign may be a high percentage of older couples who are longtime residents and whose children are grown and have left home. An area where the development of available vacant land has stopped and where large houses are being converted into apartments and rooming houses also is probably a bad risk. In addition, factors such as absentee owners, houses in bad repair, houses in foreclosure, an over abundance of "for sale" signs, a decrease in rental rates and a breakdown in the enforcement of zoning regulations and deed restrictions often warn of the impending period of decline.