Less than 1 percent of US homes for sale are located in areas that have world class transit access, but even living close to a minimal mass transit system can add to a home’s price tag. By using Walk Score’s Transit Score methodology and its own home price statistics, brokerage Redfin determined just how much prices were affected by proximity to mass transit in several major US metro areas.
Transit access is important to many homebuyers, with a recent Redfin survey finding more than one in five respondents expressed regret about not considering the length of their commute from their new home.
To determine how transit access affects a home’s value, Redfin examined home sale prices of more than a million homes that were sold between January 2014 and April 2016, and Transit Scores in 14 major US metros.
Transit Scores are calculated by totaling the “usefulness” of a route based on such criteria as the distance to the nearest stop, and the route’s frequency. Transit Scores range from zero, or “minimal transit,” to 100, with scores of 90 and above allowing the location to qualify as a rare “rider’s paradise.”
Redfin found that one Transit Score point can increase the price of a home by $2,040, or 0.06 percent on average. However, a metro’s actual average price premium does vary widely from metro to metro.
In the Atlanta, GA metro area, one Transit Score point affected the median home price by 1.13 percent or $1,901 — the highest of any of the metros in the study. The median home price is $168,000 in the Atlanta metro area, which had a Transit Score of 44, or “some transit.”
Atlanta is well known for its traffic, and according to Redfin agent Rory Haigler,“more and more, I’m working with homebuyers who want to be closer to a train or bus line for commuting to and from work. Some people even commute from the suburbs to park near a transit line to get into the metro area because it is easier than driving.”
Proximity to mass transit raised median home prices in all but one of the metro areas examined by Redfin — Orange County, CA, where one Transit Score point actually decreased the median home price by $200 or 0.03 percent. Orange County residents prefer driving and owning their own vehicles, observed Redfin agent Keith Thomas Jr.
“Parking is easy to come by and traffic isn’t bad, so it makes sense that public transit doesn’t impact the price of a home the way it would in a more urban area like L.A.,” he added. Incidentally, the Los Angeles metro area earned a “good” Transit Score of 51, with one Transit Score point raising prices by $3,095 or 0.65 percent.
At 80, the San Francisco, CA metro area had the highest Transit Score of all the metros examined for the report. However, every Transit Score point was worth about $4,845 or 0.51 percent of the median home value of $950,000.
The Boston, MA and DC metro areas also had high Transit Scores at 74 and 71, respectively. In Boston, mass transit access raises home prices by about 1.10 percent, or $3,585. Meanwhile in DC, home prices rose 0.96 percent or $3,457 per one Transit Score point.
And although New York City has merely an “excellent access” Transit Score of 84 — the highest in the US — it was not included in this study.
“Transit is an important building block to economic mobility,” said Redfin chief economist Nela Richardson.
Investing in good transit systems will result in bigger financial impact for homeowners, and give better access to jobs and public amenities to Americans of all income ranges, Richardson added. “Transit is an economic win-win for commuters.”
Click here to read the entire report.