Access to public transportation can add value to a home, according to a recent Redfin study. High-capacity transit lines can increase the potential development of real estate, resulting in an increase in property values. Today, developers are building more “walkable” neighborhoods around transit systems.
Redfin’s study reviewed more than a million homes sold during a two-year period from 2014 to 2016 and found that, on average, just a single point increase in the company’s Transit Score, a measure of accessibility to public transportation, can boost a home’s price by about $2,000.
Redfin Chief Economist Nela Richardson noted in a press release that transit “is an important building block to economic mobility.”
Redfin’s Transit Score measures the usefulness and convenience of public transportation (bus, subway, light rail, ferry, etc.) routes near a given location.
“The more that cities invest in good transit, the bigger financial impact for homeowners and the better access families of all incomes have to jobs and public amenities,” Richardson added. “Transit is an economic win-win for communities.”
According to a recent study by the American Public Transportation Association and the National Association of Realtors, values for properties located within a half-mile of public transportation performed 41 percent better than properties located outside that coveted area.
Higher home values can be a direct result of greater market demand for neighborhoods near public transportation, according to Lawrence Yun, chief economist at the National Association of Realtors.
Yun said in a release that transportation “plays an important role in real estate and housing decisions, and the data suggests that residential real estate near public transit will remain attractive to buyers.”
When making a purchase, homebuyers aren’t just selecting a house, they are selecting a lifestyle. This is particularly true with millennials, who desire shorter commutes and more walkable neighborhoods. These factors also are important to people living in larger metro areas.
In addition to increased home values, greater accessibility to public transportation offers a myriad of other benefits to homeowners, including lower transportation costs, more travel options and access to more jobs.
While values may be higher close to transit, the American Public Transportation Association notes that people living in transit-oriented development areas typically spend 13 percent of their income on transportation compared to the national average of 18 percent.
Another study last year by Redfin also found that the best cities for public transit include New York City, San Francisco and Boston. It would seem that a connection exists between how good a city’s transit system is and the resulting impact on home prices.
Location remains a key word when it comes to real estate. No matter what factors impact pricing for homes close to public transportation, buyers must always keep this factor in perspective.