High walkability equals higher profit margins when it comes to home sales, according to a new report from Redfin. The report found that homes within walking distance of schools, shopping, parks and other amenities sell for an average of 23.5%, or $77,668, more than properties that are car-dependent.
To determine how much walkability affected home prices, Redfin examined sale prices and Walk Score rankings for almost 1 million homes sold in 2019 in 16 major US metropolitan areas and two Canadian cities. About a quarter of active Redfin listings are considered walkable, with a Walk Score ranking of 50 to 100. Only about 4% are considered a “walker’s paradise,” with a Walk Score of 90 or above.
While homebuyers will pay more for walkability, that premium has dropped 2.3% since the last time Redfin conducted the study in 2015.
“The premium drop is tied to affordability,” said Daryl Fairweather, Redfin’s chief economist. “Properties that are more affordable are seeing the most demand and price growth right now, and homes in less walkable neighborhoods often fall into this category. There just aren’t as many people who can afford walkable neighborhoods. Many house-hunters are also willing to move to less walkable neighborhoods in order to get single-family homes.”
Home sales have been rising faster in car-dependent neighborhoods than in walkable neighborhoods since September 2018, Redfin reported. Prices in car-dependent neighborhoods rose 4.3% year over year in July to a median of $312,000, while walkable neighborhoods posted only a 2.3% annual increase.
The “walkability premium” also differed from city to city. In Boston, walkability increased a home’s value by an average of 29%, or $140,724 – the highest premium in dollar terms of all US regions Redfin studied. In Oakland, meanwhile, walkability only increased a home’s value by an average of 1.3%, or $9,477.