Real Estate Marketing & Beyond
Home prices in areas without mass transit services are rising almost twice as fast as those where public transportation is widely accessible, a new study has found.
The Redfin study found that the median home sale price in what it calls “car-dependent areas” has risen by 32.8% to $418,100 since January 2020. At the same time, the median home price in areas with mass transit systems has increased by just 15.6%. However, homes in “transit-accessible” neighborhoods are still worth more, selling at $540,500 on average.
The trend is believed to be related to the COVID-19 pandemic-induced demand for homes in areas where people have more room to live and explore outdoors. With the rise of remote work, coupled with bans on large crowds in urban areas, homes in the suburbs, small towns and rural areas have become much more sought after in the past year.
Steven Majourau, a Redfin agent in California’s Central Valley, said he has seen a huge influx of people moving away from the San Francisco Bay area since the pandemic began. The reason for that is simple, as houses outside of that area are bigger and more affordable, he said.
“For most people the tradeoff wouldn’t have been worth it two years ago because of the hours-long commute into San Jose or San Francisco every day,” Majourau added. “With remote work buyers can prioritize the actual home above its proximity to transportation.”
Redfin’s report was based on data that rates locations according to the convenience they provide in terms of public transportation. Locations are deemed to be “transit accessible” if public transport options exist for most trips in the local area. Those areas that are classified as “car-dependent” have more limited public transport options, hence, a car will be essential for most that live there.
The study also notes that U.S. states with larger and more affordable homes have grown more popular over the last 18 months too. It highlights states including Arizona, Colorado, Idaho and Utah that have become go-to destinations for people who formerly lived on the West Coast. People are moving to those areas because their employers now let them work remotely, so long as they have a reliable Internet connection.
Redfin Chief Economist Daryl Fairweather (pictured) said many are taking advantage of this greater work flexibility to move to cities where home prices are much lower. “Remote work has allowed many homebuyers to leave cities for far-flung suburbs,” she said.
However, Fairweather warned that the lack of public transit means the move to more remote areas could have a negative impact on the environment as people use their cars more often.
“Hopefully a less frequent commute will mean fewer hours behind the wheel,” she said. “But as offices reopen we may see commuters who used to live in the city and use public transit spending more time driving and emitting more carbon. Governments need to plan for this new reality and start providing more green transit to areas outside of major cities.”
