No one can know for sure whether their home’s value will increase over time.
However, there are plenty of factors that can increase the odds in your favor — and most of them have to do with a property’s location.
Real estate pros know that close proximity to amenities like beautiful views, local parks, great schools, and entertainment options can all improve the odds that your property investment will pay off over time.
But there’s another important location-based property perk that might just have an impact on a home’s value in the future: Its walkability score.
It makes intuitive sense that people value the ability to take a stroll to a local coffee shop or boutique fitness center from their homes. However, now some data can back this sentiment up by showing a correlation between home values and walkability scores.
Here’s what you need to know about the trend toward walkability and how it can affect property values.
The Trend Toward Walkability
Many an analyst has pointed out that the Millennial generation, in particular, seems less interested in cars than previous generations have been.
Millennials aren’t necessarily using cars less often than any other generation if they’re living in the suburbs and raising a family. However, Millennials are more likely to use mass transit and ride-sharing, and to live in urban areas where it’s easy to walk to get where you want to go.
Millennials certainly aren’t alone, though. Many other generations can appreciate walkability, if they can afford it. This has contributed to the revitalization of downtown communities. In particular, many retirees are now choosing homes in denser, more urban settings that feature vibrant nightlife and lower property maintenance needs than those in the suburbs.
Walkable neighborhoods tend to offer more convenience, character, and culture than their residential-only counterparts. Plus, the ability to walk more often gives residents a chance to live a more active, healthy, environmentally friendly lifestyle than they can in a neighborhood with car-dependent infrastructure.
That’s why an increasing percentage of new developments are now planned as mixed-use communities. In these live-work-play neighborhoods, residents and employees of local companies can reach amenities like restaurants, stores, and entertainment options — all within a short walk of their homes or offices.
You can learn more about this development trend in our ebook A Guide to Living and Investing in Mixed-Use Neighborhoods.
Walkability can be difficult to nail down with complete accuracy, but the current go-to method for calculating walkability is with the tool Walk Score.
Walk Score started as a small-scale project focused on promoting walkable neighborhoods, and it was purchased in 2014 by Redfin, a national real estate brokerage.
It’s a patented system that aims to measure the walkability of any address by awarding points based on the distance to amenities from a certain address. Amenities within a 5-minute walk (.25 miles) are given maximum points in the score, with fewer points awarded for amenities that are farther away. Only amenities within a 30-minute walk are considered in the score.
Walk Score also takes into account factors like population density, block length, and intersection density to try to calculate how pedestrian-friendly an area is based on data from mapping and census tools.
Addresses receive a walkability score from 1 to 100, with 90-100 being considered a “walker’s paradise” and 0-24 being considered “car-dependent.”
Image source: Walk Score
Walk Score has also rolled out “Bike Score” and “Transit Score” tools to help calculate just how easy it is to get around without a car from any given address.
Walkability and Property Values
In 2016, Redfin published the results of a study that found that the price of a home increased by an average of $3,250, or 0.9 percent, with each Walk Score point it gained.
The study analyzed walkability scores and property values in 14 major metro areas, controlling for factors like type of property (single family, condo, etc.), size of property, age of the building, neighborhood median income and total employment, and even market conditions (appreciation over time).
In each area studied, the homes in more walkable neighborhoods were worth more than their counterparts in less walkable locations.
And interestingly, the more walkable a city was overall, the more impact a higher walk score tended to have on property values.
“An increase in Walk Score from 19 to 20 resulted in a home price increase of about $181 on average across the metros. On the other hand, moving from a location with a Walk Score of 79 to that with a score of 80 resulted in a home price increase of over $7,000. […] The price premiums accelerate even more as the Walk Score gets closer to 100, implying high demand relative to supply for homes in high scoring city areas.”
A Few Caveats
Walk Score isn’t perfect when it comes to measuring actual walkability.
Namely, the formula that Walk Score uses to calculate walkability arguably relies too much on proximity. We all know from personal experience that even the very closest amenities to our homes aren’t always easy to get to on foot. For example, what if there’s no crosswalk across a six-lane road, or we have to walk over uneven terrain with no sidewalk?
It’s also worth noting that the correlation of walkability to home value isn’t as strong in certain markets as it is in others. Namely, in some regions, luxury buyers aren’t looking for the city life. Quoted in this Wall St. Journal article Redfin’s chief economist Nela Richardson observed that the walkability wasn’t valued as highly for higher value properties “because in areas like the Midwest, Texas and parts of California, buyers covet square footage and acreage.”
However, overall, people are flocking to cities and neighborhoods where walkability thrives — and the data shows that walkability, in general, continues to be in high demand and short supply.
Some cities are trying to meet that demand by developing neighborhoods that prioritize safe routes for their residents to walk, run, and bike to work, run errands, and meet up with friends.People are flocking to cities and neighborhoods where walkability thrives. Click To Tweet
One of these new neighborhoods is Eastern Wharf on the riverfront of downtown Savannah, Georgia. Downtown Savannah is already a sought-after destination known for its historic beauty and architecture. Eastern Wharf is redeveloping one of the last remaining riverfront properties in Savannah from an industrial space to a vibrant community with curated boutiques, greenspace, modern offices, a boutique hotel — all within an easy and safe walking distance of one another.
In addition to apartment options, Eastern Wharf will also feature luxury townhomes, industrial-style lofts, and exclusive penthouses with river views.
To learn more about the residential opportunities at Eastern Wharf and about the neighborhood, check out our full web site at Upper East River.