Thursday, August 27, 2009

Walkable Neighborhoods equals Housing Recovery and Increased Value

When I think of “Walkable Neighborhoods” the first thing that comes to mind is Quality of Life.

The idea that I don’t have to get into my automobile and instead being able to get outside, exercise and visit places where I want to be on foot is all that I need. However, there is also a direct economic benefit to Walkable Neighborhoods that may not always get recognized and in these difficult times may present buyers a great opportunity. The Concord Group, (a leading real estate strategy firm with offices in Newport Beach, San Francisco and Boston. TCG's employing 40 consultants completing over 350 assignments annually in the U.S., Europe, Asia and Latin America). recently prepared a report titled “United States Housing Outlook, When Will Markets Recover?” In this report, The Concord Group forecasts the U.S. housing market and discusses both risk and opportunity in real estate. The report shows significant variations in regional real estate markets based on a wide variety of contributing factors. One such area that was discussed was the opportunities that exist within specific submarkets even when the greater region may be suffering. The report specifically states “Locations with proximity to quality schools, accessible leisure and entertainment options and diversity of jobs will also outperform recover timeframes. Submarket-level analyses will identify opportunities and constraints that diverge from the regional average. Regions with strong long-term growth fundamentals and diversified economic bases will emerge earliest, whereas the outlying commuter markets will lag”. It goes on to say that “quality new housing” in core employment centers are expected to be an opportunity, particularly in competitive infill environments.

Another report, "Walking the Walk: How Walkability Raises Housing Values in U.S. Cities," commissioned by CEO’s for Cities which is a national network of urban leaders from civic, business, academic and philanthropic sectors look at 94,000 real-estate transactions in 15 markets. In 13 of those markets, higher levels of "walkability" were DIRECTLY linked to higher home values. The report is one of a kind in that it looked solely at the economics of living within a Walkable community and left other items such as the health and environmental benefits alone. One example was two neighborhoods in Charlotte N.C. where one neighborhood with a walk score of 54 had median home prices of $280,000 while in Whilmore, where the average score was 71, median prices of similar homes were $314,000 with each point increase in Walkability resulting in a $500 to $3000 increase in value. In the end the report concludes with the idea that "This is not about people having to live without cars." Rather, it's about giving people the option to use them less often. "They don't need to use them for every single trip, and when they do have to, they don't have to drive as far,"

Simply put, communities that are close to jobs, schools, restaurants, retail etc…are the homes that depreciate the least in tough economic times and the first to recover when things improve. So while your walking to your favorite restaurant, park or walking the kids to school, not only is your quality of life improved, by you can be secure in knowing that you’ve made the best possible investment in your home possible.


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