NPR had an interesting story earlier this week about the connection between commute time and home values. Not surprisingly, the story featured examples from the Washington, DC metro area (I guess their reporters tend to stay close to home. . . ).
It seems that while home prices for the entire DC Metro area declined some 11% last year, there was a distinctive pattern to the local variations within that data. Ashburn, located about 40 miles west of downtown DC saw average prices fall around 18% in the same time period, while in DC itself, home prices increased by about 3%. Close-in suburbs like Arlington and Bethesda have seen similar increases in their average prices. It seems that people are beginning to realize that there are tremendous trade-offs to living farther out and spending an hour or more every day in traffic. Some of these trade-offs are intangible, like time spent with family. Others are quite tangible and can be measured in dollars. With gasoline approaching $4 a gallon ($3.75 at the Texaco up the street from where I type at this very moment), the difference between a ten mile commute and a 40 mile commute is really starting to add up.
This is one very important part of why Orange line condos in Arlington have been holding their value so well even as the market seemingly became saturated with condos over the last five plus years. Arlington has done an award-winning job (literally) in managing its increased density without the increase in traffic that many predicted. In fact, Arlington saw an increase in population between 2000-2005 of something like 5% with almost no increase in traffic counts on major thoroughfares during the same time. The existence of a well-established public transportation network explains this seeming incongruity. As does the fact that most of the new housing built during that time was located very near this network.
The fact that people are less and less willing to spend half their day in the car has started to change development patterns nationwide. Atlanta, the poster child for sprawl in the 1990s has seen edge construction decline by something like 70% in the last few years while downtown building holds steady. This pattern is repeated throughout the country, especially in eastern cities that had seen major erosion of their downtown housing stock - places like Baltimore and Philadelphia.
There are bigger, more complex social developments that are part of this shift, of course. Average household size continues to decline nationwide and there are more and more people living alone. These people do not typically seek out the expansive lawns and quiet cul-de-sacs that typify exurban living. Instead, they look for opportunities for human interaction on their street, they want to be able to walk to conduct most of their daily activities and they don't need a large basement or a fifty foot hedgerow to do these things.
Joshua Stearns is a real estate agent in Arlington, VA and specializes in first time home buyers, South Arlington properties, and environmentally friendly homes. Visit http://www.stearnssellshomes.com to learn more.