A "sketchy" neighborhood looks like it might be dangerous. Often a sketchy neighborhood has old buildings that need to be repaired. There might also be people there who look violent or sneaky.
If you're sure that a neighborhood is dangerous, you usually don't call it "sketchy". Instead, call it "a bad neighborhood" or "a rough neighborhood".
Other things that you can describe as "sketchy" include:
- a hotel
- a bar or night club
- a person