Real Estate Tip: Buy Near Transit
Monday, March 25, 2013 - 12:01 PM
Homes close to good transit options made for better real estate investments during the recession, according to a new study from the American Public Transportation Association.
APTA looked at housing market data from Phoenix, Boston, San Francisco, Minneapolis-St. Paul, and Chicago from 2006 to 2011, and compared homes close to transit with homes for the metro region overall. The study found residential property values located near transit performed 41 percent better. Heavy rail, bus rapid transit, and light rail, with more frequent service and transfer options, helped real estate prices even more than commuter rail more typically found in suburbs, according to the study.
Areas with no transit options fared the worst in terms of home value.
Residents close to transit sheds -- areas that are a half-mile away from a transit stop or closer -- also had better access to jobs and incurred less transportation costs. In Chicago, residents close to the city's transit system spent $300 less on transportation per month than the regional average.
Transit is not the sole factor of course, but allowing residents wider access to local amenities has made it a real estate catalyst. Alex Boylan, a Minneapolis-based realtor, says he's noticed that properties close to the light rail or major bus routes don't stay on the market as long. "Now more people are more about community, wanting to live closer to work, and using the transportation that's provided around them," he said. In Minneapolis-St. Paul, the study showed that home prices fell everywhere from 2006 to 2011, but homes next to the Hiawatha light rail line better maintained their values by 62 percent when compared to the entire Twin Cities.
Areas with accessible transit tend to have more nearby amenities, and therefore better walkability scores, something Boylan says homebuyers have been paying much closer attention to in the last few years.
Related: What Makes A City Walkable
The years covered in the APTA study were bad years for the housing market, but now that the market's improving, Darnell Grisby, APTA director of policy and research, says the desire for a city lifestyle will only continue to grow. “The millennial generation that seeks more transit-oriented lifestyles and empty nesters that will be seeking to downsize their homes while living near amenities will ensure that this trend continues,” he says.
The study showed that The Loop in Chicago performed more than 75 percent better than the region as a whole, where retirees and young professionals are fueling one of the most dramatic downtown housing booms in the country -- though the 2010 Census showed that middle class families were still flocking to the city's suburbs.
The study corresponds with other cultural shifts. Other data shows millennials are less car-centric than their parents. A recent Zipcar survey said Americans in the 18-34 age group consider their computers and mobile phones more important in their daily lives than cars, and fewer young people are trying to get driver’s licenses.
"People are voting with their feet," says Sara Wiskerchen, a spokesperson for the National Association of Realtors, a group that partnered with APTA for the study. The real estate industry group has become a booster for transit-oriented development. Wiskerchen says NAR plans to take the study to Congress to push for more public transportation and smart growth initiatives in American cities. "Consumers are looking for, and choosing, neighborhoods that they're able to find more walkable features, that have lower transportation costs, and really just looking at communities in a smart way," says Wiskerchen.