Higher home values are linked to walkability and close proximity to public transportation, according to data by Redfin. The studies compare more than one million homes sold in 14 U.S. metro areas between January 2014 and April 2016 — controlling for property and neighborhood characteristics.
Each home was assigned a Transit Score from 0 to 100 using an algorithm based on:
- the home’s distance to the nearest public transportation stop;
- the frequency of that transportation route; and
- the type of transportation route.
Walk Scores, also from 0 to 100, were given to homes separately depending on:
- availability of walking routes to local amenities;
- the distance to nearby amenities; and
- pedestrian friendliness measured by population density and road metrics.
The closer a property is to quality public transportation, the higher its Transit Score. Similarly, the more walkable the property’s neighborhood is, the higher its Walk Score.
These metrics reveal home prices increase the closer homes are to public transportation or within walkable areas.
Of the California metros assessed, transportation had the largest influence on the Los Angeles, Oakland and San Francisco metro areas: a one-point increase in Transit Score drove up the median price by 0.65%, 0.54% and 0.51%, respectively.
Conversely, higher Transit Scores correlated with lower home prices in Orange County — the only California metro area where proximity to public transportation did not drive up home prices and likely the result of a local preference for cars as the primary mode of transportation.
Walkability had an overall smaller impact on home prices than transportation access, with the exception of Los Angeles. A single point increase in Walk Score bumped the average LA home price up by 0.83%. Comparatively, home prices in San Francisco, San Diego and Oakland only increased by 0.42%, 0.49% and 0.33%, respectively.
California’s metro regions were ranked by Transit Scores and Walk Scores as follows:
- San Francisco — Transit Score of 80 and Walk Score of 85.7;
- Oakland — 55 and 71.6;
- Los Angeles — 51 and 66.3;
- San Diego — 37 and 49.9; and
- Orange County — 27 and 43.5.
Access to transportation and walkable areas is key
Redfin’s data offers insight into what today’s homebuyers are looking for. Millennial homebuyers, in particular, have ranked walkability and public transportation as important factors when selecting a place to live.
A 2014 report on Millennial preferences by the American Planning Association found:
- 74% believed investing in public transportation and walkable neighborhoods — in addition to schools — is a more effective way to grow the economy;
- 56% preferred to live in a walkable community; and
- 81% said affordable and convenient transportation alternatives to cars are important when deciding on a place to live and work.
With desirable, high-skilled jobs flourishing in city centers and traffic congestion a concern for many commuters, demand for urban housing is on the rise. However, the convenience of city living, with its access to public transportation and pedestrian-friendly communities, comes at a premium.
As homebuyers move to the city, real estate agents will be tasked with locating properties that give buyers the urban access they desire — an undertaking for which Transit and Walk Scores may come in handy.