As remote work became more prevalent during the pandemic, would-be homeowners appear to be prioritizing affordability over a short commute, according to a recent analysis Home values within a short drive to the biggest downtown job centers are growing more slowly than homes farther away.
“Homebuyers are placing less of a premium on a short commute, thanks to the rise of remote work, Americans are searching for a combination of affordability and more space, whether that’s outdoor space or an extra bedroom to turn into a home office. In expensive, dense markets, that usually means a home farther out from the downtown core, which is more palatable when you don’t need to commute every day, if at all. In more sprawling metros, buyers are flocking to less expensive downtown cores, bringing a renewed interest to these city centers.”
Homes within a 10-minute commute to a downtown job center are among the most expensive in 18 of 35 metros analyzed. Those areas had the fastest-growing home values in nine of those metros in 2017, but now, homes closest to downtown are growing the fastest in only three metros. They are growing the slowest or falling in 11.
In metros like Cleveland, Detroit, Baltimore, and Indianapolis, where home values have typically been lower in the urban core than in the suburbs, downtown home values are trending upwards, according to the analysis. A home within 10 minutes of downtown Detroit is now $101,228 more expensive than it was in 2019, and the price of living within a 10-minute commute of downtown Indianapolis has grown $54,025 over the same period.
Americans are seeking larger, more affordable homes as flexible work opportunities bring new expectations, according to Zillow. Homebuyers are willing to live with a longer commute if they can save on housing costs.
“The pandemic significantly impacted roadway congestion levels, traffic patterns and the timing of traditional ‘rush hours’ across America, Remote work flexibility has contributed to morning rush hours being less congested and, in some markets, morning rush hour moved 60 minutes later. While highway traffic congestion plummeted in the early stages of the pandemic and is now rising rapidly across the country, local streets have been much less affected. Traffic levels have stayed stable at around 80 percent of pre-COVID levels since fall 2020.”
Metros where values are growing the slowest, or even falling, for homes within 10 minutes of the downtown job center include New York, San Francisco, Boston, Chicago and Dallas. A home with a 10-minute commute in New York is $73,673 cheaper than in 2019, and a home with the same commute in Boston is $21,175 cheaper.