Tuesday, November 24, 2009

New Study Shows More Walkable Homes Are Worth More

Conducted by Joe Cortright; Commissioned by CEOs for Cities, President and CEO Carol Coletta
Released August 18, 2009

CHICAGO - Though housing values are still slow to rebound from the collapse of the real estate market, a new analysis from CEOs for Cities reveals that homes in more walkable neighborhoods are worth more than similar homes in less-walkable neighborhoods, pointing to a bright spot in the residential real estate market.

The report, “Walking the Walk: How Walkability Raises Housing Values in U.S. Cities” by Joseph Cortright, analyzed data from 94,000 real estate transactions in 15 major markets provided by ZipRealty and found that in 13 of the 15 markets, higher levels of walkability, as measured by Walk Score, were directly linked to higher home values.
“Even in a turbulent economy, we know that walkability adds value to residential property just as additional square footage, bedrooms, bathrooms and other amenities do,” said Cortright. “It’s clear that consumers assign a tangible value to the convenience factor of living in more walkable places with access to a variety of destinations.”

Walkability is defined by the Walk Score algorithm (www.walkscore.com), which works by calculating the closest amenities – restaurants, coffee shops, schools, parks, stores, libraries, etc. – to any U.S. address. The algorithm then assigns a “Walk Score” from 0-100, with 100 being the most walkable and 0 being totally car-dependent. Walk Scores of 70+ indicate neighborhoods where it’s possible to get by without a car.

By the Walk Score measure, walkability is a direct function of how many destinations are located within a short distance (generally between one-quarter mile and one mile of a home). The study found that in the typical metropolitan area, a one-point increase in Walk Score was associated with an increase in value ranging from $700 to $3,000 depending on the market. The gains were larger in denser, urban areas like Chicago and San Francisco and smaller in less dense markets like Tucson and Fresno.
In the typical metropolitan areas studied, the premium commanded for neighborhoods with above average Walk Scores compared to those with average Walk Scores ranged from about $4,000 to $34,000, depending on the metro area.

"Walking the Walk’ shows definitively what we’ve always believed – that homes in walkable neighborhoods continue to be a good investment, and are one of the simplest and most effective solutions to fight climate change, improve our health, and strengthen our communities,” said Walk Score founder Mike Mathieu. "Our vision is for every property listing to include a Walk Score: Beds: 3 Baths: 2 Walk Score: 84."

The study included 15 metropolitan areas, finding a statistically significant positive relationship between walkability and home values in 13 areas: Arlington, Virginia; Austin, Texas;; Charlotte, North Carolina; Chicago, Illinois; Dallas, Texas; Fresno, California; Jacksonville, Florida;; Phoenix, Arizona; Sacramento, California; San Francisco, California; Seattle, Washington; Stockton, California, and Tucson, Arizona. In one metro area, Las Vegas, walkability was correlated with lower housing values, and in Bakersfield, California, there was no statistically significant connection between walkability and housing values.

Real estate data for these markets was provided by ZipRealty (NASDAQ: ZIPR, www.ZipRealty.com), a national full-service residential real estate brokerage. "Walkability is a factor we’ve always considered important for buyers and sellers when bidding or pricing a home. We appreciate that “Walking the Walk” has confirmed this intrinsic value," said Patrick Lashinsky, chief executive officer for ZipRealty. "We were one of the first sites to adopt Walk Score alongside our listings because we feel walkability helps all our clients in the home search process."

Link to the Full Report

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