For Some Homeowners, Moving Farther Out is Right Trade-Off
Buying a home involves trade-offs, particularly when it comes to commutes. Zillow Inc., Seattle, and HERE Technologies wanted to know: just how far were homeowners willing to move away from city centers to make their commute “worth it.”
The answer: 15 minutes.
The Zillow/HERE analysis of the 34 largest metro areas found homeowners will save the most money by moving 15 minutes away from the city’s urban core in Boston, Seattle, Washington, D.C. and Chicago. The report used commute and real-time traffic data from HERE Technologies, a mapping and location platform company
In the Boston metro, the typical home becomes 13.4 percent less expensive–nearly $57,260–when it is shifted 15 minutes from the downtown core. The typical home in Seattle becomes 11.3 percent less expensive, or nearly $54,599, when it’s shifted 15 minutes out.
Washington D.C. and Chicago follow Seattle in greatest home value savings by moving 15 minutes further from the city’s core. Home values in Washington D.C. fall by 9.4 percent ($37,709 in homeowner savings), and home values in Chicago decrease 8.2 percent ($18,864 in homeowner savings).
The analysis also found in some areas, such as San Antonio, Las Vegas and Sacramento, home values actually increase when they are located farther from the city’s urban core reflecting the enduring premium on suburban living in those communities. In San Antonio, the typical home would be worth 14.2 percent, or $27,509 more, if it were 15 minutes farther from the city’s core.
The report said in San Francisco, longer commute times are associated with a 5.5 percent increase in the median home value, likely spurred by high-end housing in nearby areas like Marin County and Palo Alto.
The report noted price disparity between central and outlying homes is less extreme for renters, but the trend still exists. Washington D.C. and San Francisco have the most expensive downtown areas for renters, with rent per-square-foot within 15 minutes of downtown more than twice as high as in the rest of the region.
“There has been an urban revival in many U.S. cities over the past two decades driven by evolving preferences among young adults and a long-term shift in the American economy toward service jobs,” said Zillow Senior Economist Aaron Terrazas. “But, this does come with a cost. In many cities, there’s a growing tradeoff between a short commute and an affordable home. The regular commute to-and-from work looms large over the typical American worker’s life.”
Over a 30-year career, Terrazas noted, reducing a one-way commute by just 15 minutes frees up five months of one’s life for more rewarding pursuits. “For some home shoppers, it may be worth paying more to spend less time sitting in traffic, but for others, deteriorating mortgage affordability and lifestyle needs and wants make longer commutes a reality,” he said.
