Friday, October 31, 2008

Property Near Light Rail Weathers the Storm

While housing values around the country are falling, there has been anecdotal evidence of value near rapid transit staying high or even going up. Now we have empirical evidence in Denver that this is true:

Homes near light-rail stations along the southeast line, which opened in November 2006, have increased by an average of nearly 4 percent over the past two years, according to an analysis by Your Castle Real Estate. But the rest of the Denver market declined an average of 7.5 percent.

"I know that it's always been a good neighborhood, but I didn't think it was like that," said Humphrey, who doesn't drive and frequently uses public transportation.

The closer a home is to the station, the more its value increases, according to the Your Castle analysis. Homes less than a half-mile from a station increased an average of 17.6 percent, while those 1 1/2 to 2 miles away increased just 0.1 percent on average. The data varied widely among stations, however.

17.6% is no slouching in this economy. I'd love to see the study in more detail, but the initial findings reported look very promising.


AC said...

I'd like to see a rigorous study of this that excludes an obvious alternate explanation: These denser development are built in areas that were in high demand to begin with, and high-demand areas are more likely to hold value.

I'm not saying that's the case. I'd just like to see someone try to address that possible explanation.

Cavan said...

The same thing is true here in Washington around Metro stations. That includes areas that aren't in the Favored Quarter.

Pantograph Trolleypole said...

I think the interesting thing also AC is that this new line was built next to the freeway. So the the extent which these neighborhoods already had access is interesting. I still hate running transit down freeways.

Then there is also new construction, which could cause values to go up and skew the results as well.