Home Prices Soar in Car-Dependent Neighborhoods

As many Americans flock to the suburbs searching for more space, the median home-sale price in car-dependent neighborhoods is reaching new heights. 

According to a Redfin and Walk Score report, October prices in car-dependent neighborhoods rose by 14.9% year over year to $345,000. Walk Score is a Redfin company that rates the walkability of neighborhoods, cities, and addresses. 

October data shows the highest price and most considerable price growth experienced in car-dependent areas, which are often suburbs, since at least 2014. That is the year when Redfin and Walk Score began collecting this kind of data.

However, walkable neighborhoods, which tend to be more urban, also experienced an uptick in home prices. There was an 11.3% year over year in these neighborhoods to a record $383,000 in October. This increase is slightly lower than the 13% annual rise in home prices in walkable neighborhoods in September.

Home price growth in both walkable and car-dependent neighborhoods faltered early on during the COVID-19 pandemic. In May 2020, there was a 2.2% year over year decline in prices in walkable areas. Meanwhile, there was only a small price increase of 0.8% in car-dependent areas that same month. 

Price growth has been on the rise in both types of neighborhoods since May, as remote work conditions enabled many people to relocate and search for new homes. The price growth came with the booming housing market during the summer of 2020, which continued into early autumn.

While prices in car-dependent areas skyrocketed, the number of homes for sale fell by 39.2% year over year in October. This decline in inventory is nearly four times the 10.7% drop in homes for sale walkable neighborhoods that same month. The supply of homes in car-dependent neighborhoods started dipping back in July 2019. Since the COVID-19 pandemic first made headlines in March, the housing inventory in car-dependent communities has fallen by bigger margins every month.

More Americans are working remotely and going to school at home now, leading to an increase in demand for spacious suburban properties with room for home offices and study areas. Simultaneously, many people have been hesitant to sell during the pandemic and house inventories have been short, especially in the suburbs.

Redfin data reveals which American metros have the biggest home-price-growth gaps between car-dependent neighborhoods and walkable neighborhoods as of October 2020. Miami, FL takes the top spot, with a 15.6% increase in median home-price increase in car-dependent neighborhoods and an 8.2% median home-price increase in walkable areas.

The other top four metros with the biggest differences in price growth between the two types of neighborhoods were New York, NY (+14.6% in car-dependent areas compared to +7.3% in walkable ones), Pittsburgh, PA (+19.4% vs. +12.7%), Boston, MA (+16.5% vs. +9.8%), Los Angeles, CA (+18% vs. +11.5%), and San Francisco, CA (+4.9% vs.-1.2%).