How Public Transportation Options Can Affect Your Home´s Value
James Boyer
February 24, 2008
Starting in the 1980's and continuing through about 2005, people in many suburban areas of the United States, and Canada to a smaller extent, have elected to live further away from their jobs with a larger drive to work in order to find more affordable homes. This trend is now starting to reverse for many reasons, some of which we will touch on in this article.
As families moved further and further into the suburbs and what are now called exurbs (areas more than a 30 minute drive from city centers), they found themselves becoming more and more dependent on their cars and a rural road system to get around. In the early and mid stages of this migration this was not a large problem, because, after all, gas was cheap and there was the promise from local governments that as the area´s population increased, the road systems would be expanded and improved. Later in the migration to the far outlying suburbs families, began to realize that the road systems in their areas were likely to never be expanded to the point of being able to keep up with the traffic demands placed on them. This was due to the costs involved in expanding those roads as well as the "not in my back yard" syndrome from families who would then own homes along 4 lane highways.
Starting in late 2005 with gas prices close to $3 a gallon and many families highly dependent on their gas gulping SUV´s, they started to feel the crunch (time and money) of living so far out from the many things they needed to do. Not only did these people have to sit in traffic for long periods of time, but it was also costing nearly $75 every time they filled their gas tanks. Individuals were looking for a better solution.
The trend now seems to have shifted. Families now seem to be taking into consideration public transportation options, such as train lines and bus lines when they consider what home to buy. In 2007 it became apparent that something was changing. In some areas home prices bucked the state wide averages and did much better. For example while the average home in New Jersey lost 14% of its value in 2007, in some of the towns which had good public transportation options, the average home price actually went up slightly. That is a huge difference in performance!! Living within a few miles of a train station in Northern New Jersey has shielded many home owners from depreciation as demand for those homes continues to be very strong. After all, the homes are more affordable than those in the heart of the metro area and they do not have to worry about traffic jams and the cost of gas for their daily commute.
Many experts agree that the trend of families moving to towns that offer public transportation options will continue into the foreseeable future. These trends will likely help home price appreciation in these towns as well. In many cases homes will likely appreciate faster than in towns just a few miles away which do not have the same transportation options. There are other factors that are important to ensure the best home appreciation: school quality, environmental quality, crime rates and so forth. You should consider these as well.
When searching for a home, keep the transportation options in mind, and likely, when it comes time to sell, you will have built up more home equity than someone who did not keep the transportation options in mind.
As families moved further and further into the suburbs and what are now called exurbs (areas more than a 30 minute drive from city centers), they found themselves becoming more and more dependent on their cars and a rural road system to get around. In the early and mid stages of this migration this was not a large problem, because, after all, gas was cheap and there was the promise from local governments that as the area´s population increased, the road systems would be expanded and improved. Later in the migration to the far outlying suburbs families, began to realize that the road systems in their areas were likely to never be expanded to the point of being able to keep up with the traffic demands placed on them. This was due to the costs involved in expanding those roads as well as the "not in my back yard" syndrome from families who would then own homes along 4 lane highways.
Starting in late 2005 with gas prices close to $3 a gallon and many families highly dependent on their gas gulping SUV´s, they started to feel the crunch (time and money) of living so far out from the many things they needed to do. Not only did these people have to sit in traffic for long periods of time, but it was also costing nearly $75 every time they filled their gas tanks. Individuals were looking for a better solution.
The trend now seems to have shifted. Families now seem to be taking into consideration public transportation options, such as train lines and bus lines when they consider what home to buy. In 2007 it became apparent that something was changing. In some areas home prices bucked the state wide averages and did much better. For example while the average home in New Jersey lost 14% of its value in 2007, in some of the towns which had good public transportation options, the average home price actually went up slightly. That is a huge difference in performance!! Living within a few miles of a train station in Northern New Jersey has shielded many home owners from depreciation as demand for those homes continues to be very strong. After all, the homes are more affordable than those in the heart of the metro area and they do not have to worry about traffic jams and the cost of gas for their daily commute.
Many experts agree that the trend of families moving to towns that offer public transportation options will continue into the foreseeable future. These trends will likely help home price appreciation in these towns as well. In many cases homes will likely appreciate faster than in towns just a few miles away which do not have the same transportation options. There are other factors that are important to ensure the best home appreciation: school quality, environmental quality, crime rates and so forth. You should consider these as well.
When searching for a home, keep the transportation options in mind, and likely, when it comes time to sell, you will have built up more home equity than someone who did not keep the transportation options in mind.
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