Increased housing demand and low supply push prices up
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The prices of US homes in areas dependent on cars have climbed faster than in walkable neighborhoods, according to Redfin’s latest report.
Redfin described walkable neighborhoods as places where people could accomplish some or most of their errands on foot, while those in car-dependent areas need a car to complete their chores.
Prices in car-reliant places rose 4.3% year over year to a median $312,100 in July. Meanwhile, home prices in walkable areas grew to a median of $343,900, up 2.3% annually.
Prices have been climbing faster in car-dependent areas than in walkable neighborhoods since September 2018. Four years ago, the trend was reversed.
According to Redfin, the turnabout means that many homebuyers going after affordability have been priced out of the most walkable neighborhoods – boosting demand in car-dependent neighborhoods.
"In the second half of 2018, homes in the hottest coastal markets became so expensive that most homebuyers became priced out of walkable neighborhoods, where homes tend to sell at a premium," said Redfin Chief Economist Daryl Fairweather. "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.”
Both neighborhoods saw a drop in home sales. Walkable areas experienced a bigger decline of 7.1% year over year across the US, compared to the 3.3% dip in car-dependent areas.
Housing supply in walkable neighborhoods was also down 7.4% annually and 10.6% in car-dependent neighborhoods.
As housing demand in car-reliant areas grew stronger, two metros posted the largest gains in prices, Philadelphia (17.9%) and Cleveland (10.6%). Fort Lauderdale (9.1%), Pittsburgh (8.5%), and Miami (8%) followed. Home prices in walkable neighborhoods in these metros also moved up, except in Pittsburgh.
Meanwhile, the prices of homes for walkable areas in Columbus, Ohio soared more than those in any other metro nationwide. Home prices there went up 16.3% annually versus 5.9% for places more dependent on cars.
“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,” Fairweather said. “Growing cities can combat these issues by adopting policies that encourage building more dense, affordable housing in walkable areas."
