While the Metro system may be high on the list of things Washingtonians like to complain about, proximity to a station still ranks as a top priority for many home buyers.
Even if the system is far from perfect, it’s valuable to many people to have the option of traveling to work or play without a car. Features that attract buyers, including a location near a Metro station, increase property values.
Researchers at Freddie Mac recently analyzed data to determine just how much proximity to a Metro station increased house prices. In general, buyers typically pay almost $9,000 more to live within a mile of a Metro station, according to Sam Khater, chief economist at Freddie Mac. If you want to live within a quarter-mile of a Metro station, the premium rises to $40,000.
The price premium for living close to Metro is 8.6 percent of the home price if you live within a quarter-mile of the station, but the premium declines to 7.5 percent if the home is between one-quarter and one-half mile and to 3.9 percent if the home is between one-half mile and one mile from the nearest station.
The value of living close to Metro also varies according to the price range of the homes, Freddie Mac researchers found. Generally, the premium for living within walking distance of a Metro station is highest for lower-cost homes.
The highest price premium, approximately 13 to 14 percent, is for houses priced from $310,000 to $414,900. The extra cost to buy those homes, compared with the cost of a similar home farther from a Metro station, ranges from $41,850 to $55,597.
For homes $870,000 and higher at the upper end of the scale, there’s almost no difference in price between houses within a mile of a Metro station and those farther away. More than likely, the researchers say, the higher premium on lower-cost homes results from those buyers being more dependent on Metro for transportation.
To see the report, click here.