Study: Homes Near Public Transit Worth More
September 24, 2013
Homes close to public transportation are worth more than similar properties that don't have nearby access to subways, rail lines, or buses, according to a study commissioned by the American Public Transportation Association and the National Association of REALTORS®.
Researchers evaluated five years worth of sales data in several major metros with various public transportation options. They found that homes located within a half-mile of public transportation were valued 41 percent higher than properties located outside that area.
"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," says Lawrence Yun, NAR's chief economist. "When consumers choose a home, they also choose a lifestyle. Shorter commutes and more walkable neighborhoods matter to a growing number of people, especially those living in congested metro areas."
The effect, not surprisingly, is more pronounced in cities known for public transportation access, such as New York City. Ariel Dagan, a real estate professional with Keller Williams Realty in New York City, says that on Manhattan's Upper East Side, apartment values can drop by around 15 percent to 20 percent for every block they are away from the subway line.
However, researchers found that even in cities not necessarily known for their public transportation infrastructure, the proximity to it can still be valuable to home buyers. Homes in Phoenix — which doesn't have nearly as robust of a public transit system — near bus lines and light rail transit tended to hold their home values better than homes that were further away, the study found.
"If the buyer is a single, young professional, they are most likely going to look for transportation as the main factor to their search," Dagan says. Families, on the other hand, tend to consider a broader range of factors in their home search, such as schools.
While buyers show a desire to be close to public transportation, they don’t want to be too close, the study found. In Portland, Ore., real estate professionals say that buyers there value being close to buses and light rail transit about as much as they value a home’s square footage.
"Portland has an eco-sensitive identity and has long been recognized as a transit leader," says Rob Levy, a principal broker with Keller Williams Realty Professionals in Portland. "Accessibility to public transportation is an asset and can drive the value of a property up. However, for properties too close to certain features, like the actual rails for the light rail system, property values can be adversely impacted."
Source: “Public Transportation Affects Home Values,” Bankrate.com (Sept. 23, 2013)
Updated: June 21, 2018