Buyers have to pay more for a home near a metro station, according to insights from Freddie Mac.
Generally, the price of a house increases the closer it is to a metro station. Freddie Mac found that the premium for a home located within a mile of metro station climbs 8.6%.
Freddie Mac analyzed the impact of the Washington Metro system, the second-busiest rapid transit system by ridership in the US, on home prices in the area. The average price premium of a house that is located within a mile of a metro station in the D.C. metro area is roughly $8,640.
“Proximity to a Metro train station is an amenity that is valued by homebuyers in the D.C. Metro Area, and it is reflected in increased house prices,” said Sam Khater, chief economist at Freddie Mac. “Homebuyers typically pay almost $9,000 more to be within a mile of a Metro station, and the premium rises to $40,000 to be within a quarter of a mile.”
In areas where home prices range from $310,000 to $414,900, premiums are at around 13% to 14% or $41,850 to $55,597.
“However, there’s a sweet spot when it comes to the value realized based on proximity and price segment,” Khater said. “The highest price premium is for homes sold between $310,000 to $415,000 ($467,008 is the average home price in the D.C. metro area). Local residents that fall in this category tend to depend more on public transport and thus place a higher premium on proximity to a Metro station.”