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It would seem obvious that homeowners would pay a premium to live near transportation hubs in major cities.
Not any more. In New York City, a study finds, there was a discount rather than premium associated with properties near rail stations.
That’s according to an analysis conducted by economists at Barclays.
They looked at home values along Metro North and Long Island Railroad stops, looking at Long Island, Westchester, Putnam, and Dutchess Counties in upstate New York and Fairfield and New Haven Counties in Connecticut.
What was a premium in home prices in March 2020 eroded away, and by 2021 became a discount. They studied home price data from Zillow that ran through Jan. 2022.
“People no longer want to come into the office five days a week, and are potentially eschewing a commute all together. However, even in the case of hybrid work (coming into the office 2-3 days per week), the number of commuters on any given day is likely to decrease,” said the note from Adam Lauretig, Adam Kelleher, and Ryan Preclaw.
The premium now exists for areas as far as 25 miles away from a commuter rail hub, they say.
“Because buying a home is a major investment, we believe this represents a reasonable view of commuters’ preferences and beliefs about the future of work,” they added.
They say the results suggest that suburbanites don’t see regular, five-day-per-week commutes in their future. “Even in the (relatively) transit-heavy New York metro area, we could see further car-dependent development and growth in outlying areas,” the Barclays analysts added.
