Property broker Redfin is reporting that U.S. home prices in car-dependent areas have risen twice as fast as those in transit-accessible areas since the start of the pandemic in early 2020.
The median home-sale price in car-dependent areas nationwide has increased 32.8% to a record $418,100 since January 2020, while it has risen 15.6% to a record $540,500 in transit-accessible neighborhoods.
Both increases are significant and reflect the uptick in overall demand for homes driven by the pandemic and low mortgage rates. But the outsized price growth since before the pandemic for homes in car-dependent areas--which tend to be suburban and rural rather than urban--signifies the rise of remote work, with house hunters able to prioritize affordability over commute times. Suburbs, rural areas and small towns have been hot since the beginning of the pandemic, with Redfin.com searches for rural areas and small towns spiking last spring and housing markets in the suburbs heating up more than other neighborhood types throughout 2020.
"Since the start of the pandemic, there has been a huge influx of people moving out here from the Bay Area, and the reason is simple: The houses are bigger and the prices are lower," said Steven Majourau, a Redfin agent in California's Central Valley, located east of San Francisco. "For most people, the tradeoff wouldn't have been worth it two years ago because of the hours-long commute into San Jose or San Francisco every day, either by train or by car. With remote work, buyers can prioritize the actual home above its proximity to transportation."
Homes in car-dependent neighborhoods are more competitive than those in transit-accessible neighborhoods. Fifty-six percent of homes in car-dependent neighborhoods sold for above asking price in May, versus 36% of transit-accessible homes. The typical home in a car-dependent neighborhood was on the market for 19 days before going under contract, half the time of the typical transit-accessible home (38 days).
"Remote work has allowed many homebuyers to leave cities for far-flung suburbs. Those suburbs often lack public transit, so new residents drive more often," said Redfin Chief Economist Daryl Fairweather. "Hopefully, a less frequent commute will mean fewer hours behind the wheel. But as offices reopen, we may see commuters who used to live in the city and use public transit spending more time driving and emitting more carbon. Governments need to plan for this new reality and start providing more green transit to areas outside of major cities."