Natalie Schwab

How Much is One Point of Transit Score Worth?

Homes with great transit access are extremely rare in U.S. cities. Less than one percent of homes that are listed for sale today are considered to be in a rider’s paradise (Transit Score of 90 and above). Yet in a survey of more than 1,300 people who bought a home last year, more than one in five said they wish they had paid more attention to the length of their commute from their new homes.To estimate how much transit access is worth when buying or selling a home, Redfin looked at the sale prices and Transit Score ratings of more than one million homes sold between January 2014 and April 2016 across 14 major metro areas.Here are the price premiums of one point of Transit Score on a home, grouped by metro area.
 Metro Area Transit Score  Median Sale Price $ Premium of 1 Transit Score Point on Median Home Price % Premium of 1 Transit Score Point  on Median Home Price
Atlanta 44  $168,000 $1,901 1.13%
Baltimore 58  $229,900 $226 0.10%
Boston 74  $325,000 $3,585 1.10%
Chicago 65  $220,000 $1,731 0.79%
Denver 47  $285,000 $1,366 0.48%
Los Angeles 51  $475,000 $3,095 0.65%
Oakland 55  $523,000 $2,816 0.54%
Orange County 27  $580,000 $(201) -0.03%
Phoenix 32  $204,900 $291 0.14%
Portland 51  $275,000 $1,338 0.49%
San Diego 37  $449,000 $786 0.18%
San Francisco 80  $950,000 $4,845 0.51%
Seattle 57  $375,000 $3,360 0.90%
Washington DC 71  $360,000 $3,457 0.96%

On average, across the 14 metros analyzed, one Transit Score point can increase the price of a home by $2,040. But the price premium varies widely from metro to metro. One point of Transit Score in Atlanta bumps up the price of a home over one full percentage point, or $1,901.  

“It’s easy to see a value premium for a home located near one of the main commuter lines in the metro area because walkability and access to public transportation are relatively rare in Atlanta,” said Redfin real estate agent Rory Haigler. “Atlanta is known for its traffic, so more and more, I’m working with homebuyers who want to be closer to a train or bus line for commuting to and from work. Some people even commute from the suburbs to park near a transit line to get into the metro area because it is easier than driving.”

In Orange County, the effect is small, but being convenient to public transportation actually makes a home less valuable, by $200 for an average home.

“Most people in Orange County prefer to drive their own cars; few would consider any other way to get around,” said Redfin real estate agent Keith Thomas Jr.  “Parking is easy to come by and traffic isn’t bad, so it makes sense that public transit doesn’t impact the price of a home the way it would in a more urban area like L.A.”

“Transit is an important building block to economic mobility,” said Redfin chief economist Nela Richardson.  “The more that cities invest in good transit the bigger financial impact for homeowners and the better access families of all incomes have to jobs and public amenities. Transit is an economic win-win for communities.”

These estimates compare homes by controlling for differences in property and neighborhood characteristics, including property size, number of bedrooms and bathrooms, age of the building, type of property (single-family, condo or townhouse), neighborhood median income and total employment, and controls for market conditions (appreciation over time) are also built into the model. In all metro areas, a home located in a more transit-friendly neighborhood was more expensive than the same home in a less transit-friendly location, with the exception of Orange County.

Click here to see Redfin’s 2016 report on the top 10 U.S. cities for public transit.

Analysis by Sheharyar Bokhari, Researcher for The MIT Center for Real Estate:

Methodology

To estimate how much market value homebuyers implicitly attach to a higher Transit Score, Redfin used a hedonic regression. This type of modelling is like a “comps” analysis done by real estate appraisers. The regression makes an apples-to-apples comparison between properties by controlling for different characteristics, to compare the prices of properties with different Transit Scores, “all else being equal.”

The same set of sample properties and the same hedonic regression method was used in a 2016 Walk Score study. Both this study and the 2016 study were inspired by a 2009 study, “Walking the Walk: How Walkability Raises Home Values in U.S Cities” by Joe Cortright of Impressa, Inc. The variables used in this analysis are similar to those in the 2009 study with the exception of distance to a central business district, which was unavailable for our data. In addition, Redfin also controlled for historical real estate market conditions.

The Best Cities for Living Without a Car

Bicyclist-on-cycle-track-2

Image via iStock

What makes a city livable? People have differing views, but for many city-dwellers, proximity to restaurants, grocery stores, parks and jobs are some of the key perks of urban living, especially if those destinations are accessible without a car. According to recent Redfin research, the construction of parking spaces for residential properties is starting to wane, as is the number of families who own two cars. And as traffic concerns and commute times rise across the country, many people are opting out of car ownership entirely.

Redfin compiled the latest Walk Score rankings to see which U.S. cities with populations greater than 300,000 have the highest composite Walk Score, Transit Score and Bike Score rankings. These are places where you could forgo having a car and still be able to get around town in a variety of ways, whether it be by foot, bike or public transit. And while not all cities are created equal, each of these 10 cities has infrastructure to support a car-free lifestyle.

Ranking

1. San Francisco

Even though San Francisco takes second place in every category (walking, biking and transit) the overall score is the highest in the nation. This isn’t a surprise to Redfin agents. “It’s true that most people in San Francisco don’t own cars. It’s said that if you want to own a home that has parking, plan on adding about $300,000 to the cost of your home,” said Redfin real estate agent Mia Simon. “The good news is that nearly every neighborhood in San Francisco is walkable and the BART and MUNI can basically get you anywhere you need to go. It’s very common for prospective buyers to schedule a series of home tours and travel between tours on foot and via public transit to get a feel for what life would be like at their new home without a car.”

2. New York

New York has the highest Walk Score and Transit Score rankings in the nation. Its Bike Score, on the other hand, falls to seventh place. “Even with the bike-share programs accelerating across the city, many streets don’t have special bike lanes and traffic is a deterrent for many people who might otherwise consider biking,” said Redfin agent Jonathan Makolondra. “That said, New Yorkers are certainly accustomed to getting around the city and surrounding boroughs without a car. The MTA subway system is extensive and walking is a great way to take in the sights and sounds of the city.”

3. Boston

It turns out that Boston is a great city for every mode of transportation that doesn’t involve a car. The city ranks third in the nation for Bike,Transit and Walk Score. “In general, Boston is just a really easy city to get around without a car,” said Redfin agent Megan McShane. “In addition to being known as ‘America’s Walking City,’ the T provides access to all the most popular neighborhoods via subway, bus, trolley and boat, and the commuter rail services the outlying suburbs.”

4. Washington D.C.

From Arlington to Silver Spring, the D.C. area has the fourth highest ranking in the nation with a Transit Score of 70. “The METRO provides a lot of routes into the city from various suburbs and within the city there are also plentiful bus routes,” said Redfin agent Dan Galloway. “Biking is really on the rise too. Capital Bikeshare now has 400 stations across the city and more bike lanes and routes have been popping up,” while organizations such as Bike Arlington strive to further increase the popularity of biking in the area. “The city also has plenty of walkable neighborhoods like Dupont Circle, Georgetown and Downtown/Chinatown.”

5. Philadelphia

Philadelphia has the fourth highest Walk Score in the nation and it turns out that it’s becoming more walkable as builders focus on creating walkable new construction throughout the city. “Redfin agents have noticed that a lot of walkable homes are being built in neighborhoods like Northern LibertiesFishtownFrankfordSouth Philly and Point Breeze,” said Redfin agent Tom Lewis. “In addition to great walkability, the city offers plenty of public transportation options as well. Philly is also known as one of the top cities in the nation for bike commuters.”

6. Chicago

“Especially if you live in neighborhoods close to the Loop, a car isn’t necessary in Chicago. Lincoln Park, River North, the South Loop – they’re all worlds unto their own, where you can walk to everything you need,” said Redfin agent Jenn Kim. “Should you want to get out of your neighborhood, the El is a great option, plus the city’s invested a lot in its biking infrastructure. In the summer, the Divvy bike-share program is popular, and it’s not uncommon to see large groups of people cycling home via Milwaukee Avenue during the evening commute.”

7. Minneapolis

“Last year Minneapolis was the only U.S. city on a worldwide list of bike-friendly cities. Mayor Betsy Hodges’ administration has emphasized building more protected bikeways to traverse town, and there’s always the old favorites like the Chain of Lakes trails and the Midtown greenway,” said Redfin agent James Garry. “Add to that a growing light rail system, on-time buses and vibrant neighborhoods like Uptown and Dinkytown, where you can walk to everything you need, and it should be no surprise to see Minneapolis on this list.”

8. Miami

“Even though Miami ranks high for walkability with a Walk Score of 78, its Bike and Transit Scores leave a little more to be desired. With a Bike Score of 60, two wheels probably won’t take the place of four wheels any time soon, but that said, there are neighborhoods like Downtown and Little Havana where cycling is a viable transportation option,” said Redfin agent Cecilia Cordova.  “If you’d prefer to get around town via public transit, there are several options including the Metrorail that runs from West to South Miami crossing through Downtown.”

9. Seattle

“The expansion of the light rail up to Capitol Hill and the University District and the recently approved light rail extension plan indicate that Seattle’s Transit Score could be improving within the next year or two, potentially making Seattle an even friendlier city for those who’d like a car-free commute or lifestyle,” said Redfin agent Kyle Moss. “The bus system also offers great options for commuters and travelers alike, and neighborhoods like Capitol Hill, Belltown and Madison Park are really fun, lively places to walk around. For those who love to bike, Seattle also has some fantastic bike trails, many of them scenic like the Burke-Gilman.”

10. Oakland

“Oakland doesn’t fall short when it comes to public transportation,” said Redfin agent Mia Simon. “The BART and A C Transit are both good options for navigating the city. In addition, the Trans-Bay express bus just makes a few stops and then heads directly to San Francisco. There’s also a ferry from Jack London Square if you prefer traveling by water. Neighborhoods like  Rockridge and Uptown, Lake Merrit/Grand are all super walkable. There are also 13 neighborhoods with a Bike Score above 90, making them a biker’s paradise!”