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Home Prices Rose Twice as Fast in Car-Dependent Neighborhoods as Transit-Accessible Areas During the Pandemic

Written by Posted On Saturday, 10 July 2021 05:13
Home Prices Rose Twice as Fast in Car-Dependent Neighborhoods as Transit-Accessible Areas During the Pandemic

Home prices in car-dependent areas are up 33% since before the pandemic versus 16% for transit-accessible neighborhoods, reflecting the rise in remote work and the declining importance of proximity to public transportation

Home prices in car-dependent areas have risen twice as fast as those in transit-accessible areas since the start of the pandemic, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.

The median home-sale price in car-dependent areas nationwide has increased 32.8% to a record $418,100 since January 2020, while it has risen 15.6% to a record $540,500 in transit-accessible neighborhoods.

Both increases are significant and reflect the uptick in overall demand for homes driven by the pandemic and low mortgage rates. But the outsized price growth since before the pandemic for homes in car-dependent areas—which tend to be suburban and rural rather than urban—signifies the rise of remote work, with house hunters able to prioritize affordability over commute times. Suburbs, rural areas and small towns have been hot since the beginning of the pandemic, with Redfin.com searches for rural areas and small towns spiking last spring and housing markets in the suburbs heating up more than other neighborhood types throughout 2020.

"Since the start of the pandemic, there has been a huge influx of people moving out here from the Bay Area, and the reason is simple: The houses are bigger and the prices are lower," said Steven Majourau, a Redfin agent in California's Central Valley, located east of San Francisco. "For most people, the tradeoff wouldn't have been worth it two years ago because of the hours-long commute into San Jose or San Francisco every day, either by train or by car. With remote work, buyers can prioritize the actual home above its proximity to transportation."

The report is based on data from Transit Score®, a tool from Redfin company Walk Score® that rates locations based on how convenient they are to public transportation. A place is deemed "transit accessible" if public transit is convenient for most trips, while "car dependent" means there are only a few nearby public transportation options. Places with a score of 0-49 are considered "car dependent," while places with a score of 50-100 are considered "transit accessible."

Homes in car-dependent neighborhoods are more competitive than those in transit-accessible neighborhoods. Fifty-six percent of homes in car-dependent neighborhoods sold for above asking price in May, versus 36% of transit-accessible homes. The typical home in a car-dependent neighborhood was on the market for 19 days before going under contract, half the time of the typical transit-accessible home (38 days).

Housing market summary, transit-accessible versus car-dependent neighborhoods, May 2021
 

Transit-accessible areas

Car-dependent areas

Median sale price

$540,500

$418,100

Median sale price, change since
January 2020

15.6%

32.8%

Median days on market

38

19

Share of homes sold above list price

36.4%

56%

"Remote work has allowed many homebuyers to leave cities for far-flung suburbs. Those suburbs often lack public transit, so new residents drive more often," said Redfin Chief Economist Daryl Fairweather. "Hopefully, a less frequent commute will mean fewer hours behind the wheel. But as offices reopen, we may see commuters who used to live in the city and use public transit spending more time driving and emitting more carbon. Governments need to plan for this new reality and start providing more green transit to areas outside of major cities."

To read the full report, including charts, please visit: https://www.redfin.com/news/transit-accessible-neighborhood-home-price-increase/

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Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent. You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

https://www.redfin.com

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