For many Americans, the causal stroll around the neighborhood is an important part of day to day life. But as homebuyers continue to grapple with rising home prices, a new report from Redfin suggests that many are now prioritizing affordability over walkability.
According to the company’s data, home-sale prices in car-dependent housing markets across the country increased 4.3% year over year to a median of $312,100 in July. However, home-sale prices in walkable neighborhoods across the country rose 2.3% year over year to a median $343,900.
Redfin indicates that home prices have been rising much faster in car-dependent neighborhoods since September 2018, which is around the same time the housing market began to cool.
“For at least the four years prior, home prices generally increased faster in walkable neighborhoods than in car-dependent ones,” Redfin writes. “The trend reversal likely reflects that many homebuyers, chasing affordability, have been priced out of the most walkable neighborhoods. As a result, demand has grown stronger in car-dependent neighborhoods.”
Redfin reports that although home sales were down in both walkable and car-dependent areas in July, the decline was the strongest in walkable areas.
During the month, home sales in walkable neighborhoods posted a 7.1% annual drop nationwide. This is compared to a 3.3% decline in home sales in car-dependent neighborhoods.
However, while supply of homes in walkable areas was down 7.4% year over year, it declined a whopping 10.6% in car-dependent neighborhoods, according to Redfin.
“In the second half of 2018, homes in the hottest coastal markets became so expensive that most homebuyers became priced out of walkable neighborhoods, where homes tend to sell at a premium,” said Redfin chief economist Daryl Fairweather. “It’s not that people value walkability any less than they used to. Many homebuyers are simply relegated by their budgets to live in car-dependent areas, which have since seen demand and home prices grow at a faster rate.”
“The trend also has implications for society, with families becoming further segregated by class and race, as well as for the environment, as more demand in car-dependent areas means more carbon emissions,” Fairweather said. “Growing cities can combat these issues by adopting policies that encourage building more dense, affordable housing in walkable areas.”
The image below highlights the annual change in median sale prices for homes in walkable neighborhoods:
NOTE: Redfin’s study is based on data from Walk Score, a Redfin company that measures the walkability of addresses.
Published at Fri, 30 Aug 2019 20:10:00 +0000