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Walk This Way? Home Prices Rising in Certain Areas

Redfin reports that home-sale prices in neighborhoods that are walkable [1] increased annually 2.3% to an average of $343,900 in July, compared to 4.3% growth in car-dependent areas. 

The average sales price for a home in a car-dependent area is $312,100. According to the report, an area is deemed walkable if some activities can be accomplished on foot, opposed to have to use a vehicle. 

Additionally, prices have been rising faster in car-dependent neighborhoods than in walkable areas since September 2018. Home prices increased faster in walkable neighborhoods than in car dependent ones for the four years prior. 

“The trend reversal likely reflects that many homebuyers, chasing affordability, have been priced out of the most walkable neighborhoods,” the report states. “As a result, demand has grown stronger in car-dependent neighborhoods.”

Daryl Fairweather, Chief Economist for Redfin, said prices began to skyrocket for homes in the coastal markets during the second half of 2018, with prospective buyers being priced out of walkable neighborhoods.  

“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,” Fairweather said. “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.”

Home sales were down for both walkable and car-dependent areas in July, but walkable areas saw the biggest year-over-year drop at 7.1%. Car-dependent areas saw home sales fall 3.3% from last year. 

The supply of homes in walkable areas was down 7.4% from last year and car-dependent areas saw supply drop 10.6%. 

San Jose, California, and Seattle, Washington, had the largest price drops in walkable areas, as the market saw prices fall 7.2% and 6.5%, respectively. Car-dependent neighborhoods in San Jose reported prices increased 1.9% and 1.5% in Seattle. 

Pittsburgh, Pennsylvania (-5.6%), Oakland, California (-2.1%), San Diego, California (-1.9%), and Houston, Texas (-0.2%), also posted declines in walkable areas. 

Home prices in walkable areas in Columbus, Ohio, had the highest growth, rising 16.3% annually.