Homes in walkable neighborhoods enjoy premiums, but not as much as they once did

Buyers were willing to pay more for homes where nearby amenities can easily be reached on foot, according to the real estate company Redfin. However, this premium was not as pronounced as it was in recent years.

The company analyzed nearly 1 million homes in 16 major metropolitan areas in the United States as well as two Canadian cities. The properties' 2019 sale prices were compared with the walkability rating assigned by the resource Walk Score, which determines how easily a property's residents could walk to resources such as grocery stores, restaurants, parks, and shops.

Homes that were considered walkable, or had Walk Scores of 50 to 100, sold for an average of 23.5 percent more than properties where a resident would be more reliant on a vehicle. This amounted to an average premium of $77,668 attributed to walkability.

Buyers may be more willing to pay more for a walkable home not only because of the convenience of being able to walk to nearby attractions, but also because this quality is fairly rare among available listings. Only one in four active listings in the 18 metro areas achieved a Walk Score of 50 to 100, and just 4 percent had a score of 90 percent or higher.

Boston buyers paid the highest premium for a walkable home, spending an average of $140,724 more (29 percent) than a less walkable home. Redfin attributed this high premium to the city's flat profile, which makes it easier to traverse on foot, as well as a robust public transportation system, which made it easier for residents to get around without a vehicle.

Proportionally, buyers in Atlanta paid the highest premium for a walkable home.

Just 11 percent of homes in this market had a good walkability score, and these homes sold for 30.2 percent more than less walkable homes – an average premium of $74,741.

However, the premium tied to walkability was also less pronounced compared to three years earlier. Walkable homes sold in 2016 for 25.8 percent more than properties that were more dependent on vehicles.

"The premium drop is tied to affordability. Properties that are more affordable are seeing the most demand and price growth right now, and homes in less walkable neighborhoods often fall into this category," said Daryl Fairweather, chief economist at Redfin. "There just aren't as many people who can afford walkable neighborhoods."

Redfin previously found that home prices were rising more slowly in walkable neighborhoods than in neighborhoods where residents relied more on vehicles. In July 2019, the median price of a listing in a walkable neighborhood was up 2.3 percent from the previous year to $343,900, while the median price in a less walkable neighborhood rose 4.3 percent to $312,100.

Fairweather also noted how buyers are often willing to live in neighborhoods that are farther away from amenities if it means they can purchase a single-family home. A previous Redfin survey found that 89 percent of respondents said they would prefer to live in a single-family home with a longer commute rather than a triplex with a significantly shorter commute.

Walkability was a negligible factor in home values in eight of the markets in the report, accounting for a premium of less than 1 percent. In Oakland, Calif., a walkable home sold for an average of 1.3 percent less—$9,477—than less walkable homes.