When it comes to real estate, location is everything as the old saying goes. While neighborhood amenities like shops, restaurants and good schools are important, so is public transportation. Of course, in suburban and rural areas, this may not be available or relevant, but in urban areas, buyers seem to be willing to pay a premium for proximity to transit.
So what should you know about proximity to transportation and how it affects property values?
Transit Is Good—With Exceptions
While generally people do enjoy easy and walkable access to public transportation, there are limitations and exceptions to this. For example, it’s more likely to increase property values in some cities than others. In cities like New York, Boston, and Washington D.C., property values do often seem to go up with proximity to public transport, but in Atlanta, if a higher-income area is near a rail station it can actually show declines in property values. In Miami, which is home to the MetroRail, there is no apparent property value increase associated with proximity.
Additionally, while living close enough to a station to walk can be good for property values, living too close can have the opposite effect.
Other variables that may impact the effects of transit on nearby property values include:
- The most significant impact on value tends to be when a property is around one-quarter to a half-mile from a station, which is generally considered walking distance.
- If a station or rail line offers more access to better employment opportunities, then it also tends to have a great effect on property values.
- Even buyers who prefer transit proximity may not want to be able to hear or see it.
The National Association of Realtors (NAR) and the American Public Transportation Association did a study that looked at five years of sale data across several U.S. cities. That research found that, on average, property values within what’s called a public transport shed did 41% better than properties outside that area.
A public transportation shed means that the properties are within a half-mile of transportation.
Lawrence Yun, chief economist for NAR, spoke out on the data saying that transportation will likely continue to play an important role in residential real estate and remain an attractive feature in the eyes of buyers. He said that buying a home is about choosing a lifestyle, and people often prefer shorter commute times and living in a more walkable neighborhood.
One U.S. city where this is especially true is New York City.
Apartment values can drop by anywhere from 15 to 20% for every block you go away from the subway line.
Even in cities that aren’t necessarily associated with a strong public transportation city like Phoenix, being near a light rail transit station or bus line could prove valuable. Along with convenience, the environmental element could play a role as well.
Are you ready to start prioritizing what’s important to you in a home and find the property of your dreams? If so, EffectiveAgents® can help.