Home Values Boosted by Walking Convenience
CEOs
for Cities is a national network of urban leaders dedicated to building
and sustaining the next generation of great American cities. They just
produces a study based on data from 94,000 real estate transactions in
15 major markets provided by ZipRealty
Here is What They Discovered
Homes
within walking distance of schools, parks and shopping were worth more
than homes in neighborhoods where you need a car to do anything.
Typically, the study revealed equity premium for homes with higher Walk
Scores ranged from $4,000 to $34,000.
Not long ago all you had
to do was buy a home and you would profit, now the easy money is gone.
Investment value and future return have to part of the purchase
decision. According to CEOs for Cities, Walkable places have some of
the best chances of perfoming.
Here is How it Works
A
mathematical algorithm was developed that measured the walkability of a
home. It graded the home based on how close it was to shopping, schools
etc and scored them from 0 to 100.
Allowing for other factors
such as home size, bath and bedrooms etc, the study found that a
one-point increase in the Walk Score is linked to an increase in home
value between $500 and $3,000.
The premium isn't quite the same
from place to place. It seems that urban densitiy showed higher price
gains based on higher Walk Scores. In smaller cities, like Tuscon and
Fresno, price sensitivity to the walk score wasnt as great.
Rentability
It
wasnt covered in the study, but my experience tells me that I can rent
a home in the flats where you dont need a car to do anything faster and
for more money than a comparable home in the hills. Home buyers need to
consider the rentability factor as well. It compliments and confirms
that being close to amentities is important to people and that they
will pay more for the convenience.
Long Run Implications
Reshaping the Dream
We
may be in a generational shift regarding how people will live and how
we define place. People everywhere are returning to our cities because
the suburb hasnt fulfilled us. Its a place of spatial separation. And
it is short on amenities and long on fuel costs and commute time.
Suburban
living is losing its shine. Its quite possible that placing a higher
value on walkability is a reflection of the roll up of the suburb as we
know it. The housing bubble encouraged unsustainable growth in places
where land was cheap shaping a low-density sprawl of single family
homes.
The higher value we now place on walkability reflects new
priorities like saving energy, commuting less, better mass transit,
conserving land and walking more. My money is on the city.
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