Walkable places are growing in value almost everywhere
Strong Towns member Joe Cortright runs the think tank and blog City Observatory. This post is republished from City Observatory with permission.
For some time, our research at City Observatory, and that of other scholars has shown that houses with high levels of walkability (as measured by Walk Score) command a premium over otherwise similar homes in less walkable locations. Our estimates are that a single additional point of WalkScore is worth $3,500 in additional home value. Real estate analytics rivals Redfin and Zillow have both found statistically significant correlations between walkability and home values for a wide range of US cities.
A recent study from Redfin looks at the variations in home appreciation rates between the most walkable homes and those located in car-dependent locations. The study gathers data for individual metro areas, and compares home values within metro areas for the two types of housing. In most metropolitan areas, homes in more walkable areas are worth more than homes in car dependent areas.
Walkability commands a value premium in most US markets
For each metropolitan area, we’ve computed the walkability premium—the difference in the average value of homes in walkable neighborhoods compared to the average value of homes in car-dependent neighborhoods. This map shows home values for the 50 largest metro areas. Areas shaded green have a premium for walkable homes over ones in car-dependent areas; red shows metros where car-dependent homes are more valuable, on average, than in walkable neighborhoods. You can hover over each metro area to see the average value of each home type.
In 2019, roughly two-thirds (35 of 51) of metro areas with a population of a million or more had a positive walkability premium. In only a few metropolitan areas, mostly in the Rustbelt, do walkable urban neighborhoods sell at more than a 10 percent discount to houses in car dependent neighborhoods (i.e. Baltimore, Cleveland, Detroit, Milwaukee, Pittsburgh, Providence, Rochester).
While the premium for walkability is important, a more compelling bit of evidence comes from looking at the trend in the relative value of homes in walkable and non-walkable neighborhoods over time. What the data show is that the walkability premium has continued to increase over time. The Redfin report’s headline emphasizes a very small short term decline in the value of homes in the most walkable neighborhoods compared to car dependent ones. In our view, this minor correction masks the much larger, longer term trend of relatively rising values for more walkable places.
Walkable homes are gaining value relative to car dependent homes almost everywhere
To get a sense of the longer term trend in the value of walkability, let’s take a closer look at the data. Redfin thoughtfully makes its estimates available on its website, so we’ve compiled their estimates for the nation’s largest metro areas (those with 1 million or more population). We’ve focused on the changes in home prices between May of 2012 and May of 2019. In this map, green shading indicates which metros experienced an increase in the value of walkable homes relative to car dependent homes. Red shading shows walkable homes appreciated relatively less than car dependent homes. Again, you can hover over a particular metro to see the home values for each category for 2012 and 2019, and also see the percentage premium for walkable homes, and the change in the premium over the seven-year period.
The trend is clearly for walkable areas to gain value relative to car-dependent ones. Of the 51 metro areas for which we have data, 44 experienced an increase in average values in walkable areas relative to car-dependent ones over the period 2012 to 2019.
The premium that buyers pay for walkable homes is increasing in size, and is becoming more and more common in metropolitan areas across the United States. The walkability premium is a clear market signal of the significant and growing value Americans attach to walkability. Its also an indication that we have a shortage of cities. We haven’t been building new walkable neighborhoods in large enough numbers to meet demand; nor have we been adding housing in the walkable neighborhoods we already have fast enough to house all those who would like to live in them.
Top image via Koushik Chowdavarapu.