Neighborhoods for Walkers Carry Higher Prices

If you are looking for a home in a neighborhood that is within walking distance to nearby amenities, you are going to pay a little more than homes in other neighborhoods. That is not necessarily a bad thing, however.

A recent report of more than 94,000 real estate transactions in recent months studied the prices of homes in 15 markets and their proximity to conveniences in the area. The study showed that in 13 of the 15 markets, homes that had higher levels of “walkability” also tended to have higher values than the homes that did not.

The study was named “Walking the Walk: How Walkability Raises Housing Values in U.S. Cities.” It shows that homebuyers are willing to pay extra for a home located in a neighborhood that is just minutes away from quality schools, grocery stores, parks and other conveniences. Being able to walk to these places instead of needing to drive there is of utmost importance to homebuyers who want to enjoy their surroundings and get some fresh air as well. In addition to those benefits, these types of homes are believed to hold their value better than other homes. This means that when it comes time to sell, the owner will be able to get a better price for it because of its proximity to various features and conveniences in the surrounding area.

The study used calculations from algorithms based on addresses and the amenities nearby. Homes were given a score between 0 and 100 with 100 meaning that it was the most walkable. Any score above 70 meant that it was entirely possible to walk to the various businesses and other features. The formula also took into consideration the size of the house, the features, mortgage rates, the income level of the neighborhood and other factors. Depending on the actual market, a one-point difference in the “walk score” could mean a difference of $500 and $3,000.

One of the few places where this correlation was not made was in Las Vegas. In this city, a high walkability score showed lower home values. That’s probably because those neighborhoods are not in the best areas of the city for one reason or another. In Bakersfield, California, the walkability score showed no significant correlation to home prices. However, the study did not look into why these markets were different than the others. According to Matt Lerner, an official with Front Seat which is the company that created the Walk Score, the reason could be because of the number of foreclosures and trends within those areas.

Does the “walkability” of a particular neighborhood help you decide which house is best for you? Or does it even matter? Let us know your thoughts below.