It’s no secret that Nashville home prices are on the rise, but how does walkability affect a home’s value? Walkability, defined as a measure of how friendly an area is to walking, is a big consideration for homebuyers. Quick access to parks, shopping, restaurants and schools are highly-desired features of a neighborhood. Access to public transportation is another consideration. Statistics show that very few Nashvillians use public transportation. The U.S. News & World Report recently found that only 1% of Nashvillians use public transit. (This is below the national average and something Mayor Megan Barry is trying to change – read our last blog on this subject). As a result, certain neighborhoods are rising in popularity (and cost!) due to their walkability and access to sidewalks, bike lanes and future public transportation stops.
The connection between home value and walkability is measured by the Walk Score algorithm. According to a 2009 study “Walking the Walk,” Walk Score “measures the number of typical consumer destinations within walking distance of a house.” Walk Scores range from 0 (transportation/automobile required) to 100 (most walkable). The study looked at data from over 90,000 home sales within 15 markets in the U.S. After controlling factors such as size, number of bedrooms/bathrooms and age of the home, along with the neighborhoods in which the homes were located (including the neighborhood’s income level, distance from the downtown area and accessibility to employers), the study showed a positive correlation between walkability and housing price in 13 out of the 15 markets. In other words, with all characteristics of a home being equal, a home in a walkable community was worth more than a home elsewhere.
The closer a Walk Score is to 100, the more impact a point increase has on price. In the U.S., less than 2% of homes on the market are considered a ‘walker’s paradise’ (score of 90 or above). Demand for high walkability communities is growing by the day. Fifty-six percent of Millennials and 46% of Baby Boomers prefer walkable communities with a five minute or shorter walk to dining and other amenities. Though demand is high, supply is often low…especially when it comes to affordable housing. In Nashville, Mayor Barry is offering incentives for developers in Davidson County in hopes of creating more affordable and workforce housing projects. The hope is that people who work in the city will be able to live in the city as well.
Typically, an increase of just one Walk Score point jumps a home’s price up by an average of $3,250. The chart below demonstrates that in Atlanta (where the median sale price of a home is $168,000), the dollar premium of one Walk Score point is $2,838. Though not listed below, it is safe to assume that Nashville would be comparable (our average housing cost from 2010-2014 was $192,200). When considering luxury homes, the price increase is even greater. One Walk Score point increase raises a luxury home’s price by a staggering $6,800, though homebuyers in the market for a luxury home are usually willing to pay more for walkability and convenience.
Another study estimated the effect of a 15-point Walk Score increase across a number of metropolitan markets. They found that a 15-point jump would raise home values by an average of about 12%, with the actual values ranging between 4 and 24% depending on the metropolitan area. Chicago had the greatest effect of increases in walkability, and New York the least.
Enough about other cities! If you were wondering which Nashville neighborhoods have the highest walkability and some of the fastest rising home values, here are a few of the top areas:
- East Nashville: 51
- Germantown: 65
- 12 South: 78
- The Gulch: 78
- Midtown: 93
- Downtown: 96 “Walker’s Paradise”
[Source: www.walkscore.com]
We hope that you will consider The Southbound Group when looking for your next home, whether it be in one of these highly walkable areas or elsewhere. As always, we are here to answer any questions you may have! Contact us at www.southboundgroup.com.