Study: Home Prices Rising Faster in Car-Dependent Areas
September 3, 2019
Buyers are prioritizing affordability over walkability, according to a new analysis from the real estate brokerage Redfin.
Home sale prices in walkable neighborhoods nationwide rose in July by 2.3% year-over-year to a median of $343,900. On the other hand, median home price rose 4.3% to $312,100 for homes in car-dependent areas, Redfin’s analysis shows. This has been a change in the recent past, when walkable neighborhoods were seeing bigger increases and more demand.
“In the second half of 2018, homes in the hottest coastal markets became so expensive that most home buyers became priced out of walkable neighborhoods, where homes tend to sell at a premium,” says Redfin Chief Economist Daryl Fairweather. “It’s not that people value walkability any less than they used to. Many home buyers are simply relegated by their budgets to live in car-dependent areas, which have since seen demand and home prices grow at a faster rate.”
But as buyers look further out for affordable house, walkable areas are seeing price declines, which may even out the trend. The biggest losers: Walkable areas in San Jose, Calif., and Seattle, saw 7.2% and 6.5% price declines, respectively, in July, according to the Redfin analysis. Meanwhile, prices for homes in car-dependent neighborhoods within those metro areas increased by 1.9% and 1.5%, respectively. Other metros that posted year-over-year drops in home sale prices in walkable neighborhoods in July included Pittsburgh (-5.6%); Oakland, Calif. (-2.1%); San Diego (-1.9%); and Houston (-0.2%).
Philadelphia and Cleveland saw the biggest increases in home prices in car-dependent neighborhoods, the analysis finds. Philadelphia led with a 17.9% annual increase in July in its car-dependent neighborhoods, followed by Cleveland at 10.6%; Fort Lauderdale, Fla., at 9.1%; Pittsburgh at 8.5%; and Miami at 8%.
And in 20 markets, including Columbus, Ohio, and Kansas City, Mo., and Detroit, median price increases in walkable neighborhoods outpaced those in car-dependent neighborhoods.
Updated: September 20, 2019