Homebuyers consider commute costs when shopping
WASHINGTON – June 4, 2014 – A the National Association of Realtors® (NAR) recent convention, attendees discussed transportation and its impact on today's homebuyers. Most agreed, however, that traffic congestion is here to stay, and there isn't anything that can be done about it.
In a panel organized by the Richard J. Rosenthal Center for Real Estate Studies at Realtor University, NAR Chief Economist Lawrence Yun joined other economists to discuss traffic and commuting and their impact on the decision to buy a home.
"There is no way to solve traffic congestion," said Anthony Downs, economist from The Brookings Institution. "There is no city in the world rich enough to build an adequate amount of roads to accommodate all of the workers and students who want to be on the road at the same time. Congestion is simply an inexorable part of the way cities grow."
And cities keep growing. Companies looking for skilled workers and other firms to interact with and do business together are staying in the larger cities where these resources are readily available.
"Skilled workers move where they can find work, creating more traffic and driving up housing prices," said Lawrence Yun. "It creates a positive feedback loop; the more skilled workers employed in an area, the more others want to move there."
Yun said that means the future of real estate development could be toward more walkable communities, with amenities such as shopping, transit and entertainment within walking distance, eliminating the need to drive.
However, Downs disagrees with Yun.
"There are 250 million cars in the U.S., and the auto industry is booming," Downs says. "Also, housing prices are highest in the biggest, most walkable cities. Consumers won't move to the city for the convenience of transit or walkability if they simply can't afford to live there."
This means that many of today's consumers focus on cutting commuting costs rather than eliminating them.
"Seventy-three percent of recent home buyers said that commuting costs were an important factor when deciding whether or not to purchase a home," said NAR economist Jessica Lautz. However, it's important to take into account the demographic and age of the buyer.
Younger, single buyers place more importance on urban amenities. Marriage and parenthood are what usually inspire people to move out of big cities to more rural areas.
"Of the 73 percent who said that commuting costs were a home buying factor, the median age was 38. These are the people who are driving to work every day and dropping their kids off at school," said Lautz.
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