There’s the old saying in real estate, “Location, location, location.” If you’re the type of homebuyer who prefers to walk or bike instead of drive, or live just a few steps from your favourite cafe, a walkable location is a must. However, an easy stroll to the local grocery doesn’t necessarily mean an easy time for your wallet.
A recent study conducted by Redfin examined how much more buyers can expect to pay for ‘walkable homes’— residences within walking distance of schools, parks and other important urban amenities. The study compared data from Walk Score and the sale prices of over one million homes sold in 2019 across 16 United States metropolitan areas and two Canadian cities.
Housing Market News Alerts
Sign up now for news alerts on the Canadian housing market
Beating out most major American cities, Vancouver residents were found to pay the second-highest price premiums in North America and the highest in Canada for amenities within walking distance. For a 29.5 percent premium, homes in Vancouver that were deemed ‘walkable’ sold for an average of $265,421 more than comparable properties. For a marginally higher premium, Atlanta residents paid the most out of the cities surveyed, for a total premium of $74,741, or 30.2 percent above average prices.
By contrast, homes in Boston, Massachusetts sold for an extra premium of $140,724, a 29 percent increase, while Washington, DC residences sold for $102,166 higher than comparables, a 24.9 percent increase. Toronto ranked sixth on the list, with buyers expected to pay a 15.8 percent premium, or $98,631 more, for a home in a walkable location.
Walk Score ranks homes based on their proximity to amenities using a scale of 0 to 100 — the higher your score, the more walkable your location is. A quarter of active listings, the survey explains, are considered walkable, earning them a Walk Score between 50 and 100. Only four percent of homes on the market have a Walk Score of 90 and above, which would place them in the Walker’s Paradise category. Vancouver and Toronto rank closely when it comes to the Walk Score, with Ontario’s capital scoring a 71 against the West Coast city’s score of 78.
While home shoppers have historically shelled out more to be in walking distance of their favourite amenities, premium prices have been dropping in some cities. Meanwhile, car-dependent communities have seen a rise in prices. Nation-wide, walkable home premiums in the United States dipped by 2.3 percent from 2016 to 2019.
“The premium drop is tied to affordability. Properties that are more affordable are seeing the most demand and price growth right now, and homes in less walkable neighborhoods often fall into this category,” writes Redfin Chief Economist Daryl Fairweather in the study. “There just aren’t as many people who can afford walkable neighborhoods. Many house hunters are also willing to move to less walkable neighborhoods in order to get single-family homes.”
Redfin reports that prices in commuter areas have been on the rise since September 2018. In one such case, prices in car-dependant neighbourhoods saw an 4.3 percent year-over-year increase in July, compared to a lesser 2.3 percent increase of prices in walkable communities.
While prices in Canada’s two biggest cities have shown few signs of cooling down, smaller price increases have been noted in surrounding communities as buyers seek out more affordable, but less walkable options. In one case, Mississauga, part of the Greater Toronto Area’s Peel Region, saw a median price gain of six percent year-over-year in 2019.