Would you be willing to spend longer commuting to work if it meant paying less for where you live? If so, you’re not alone. A new report from Zillow finds that homebuyers during the COVID-19 pandemic have been willing to trade long commutes for lower prices.
As The Wall Street Journal reported on Wednesday (July 21), home prices in some of the country’s most expensive metro regions rose faster in areas with lengthy commutes compared to places with shorter commutes.
“That is a reversal from prior years, when home prices in those metro areas accelerated faster in neighborhoods close to job centers,” noted the report. “Analysts say the change reflects that commute length has declined in importance for home buyers, as many workers expect to travel to their offices less often going forward. At the same time, rapidly rising prices have made affordability a bigger concern for many buyers.”
Zillow’s analyst looked at the Boston area and found that neighborhoods within a 10- to 20-minute commute from a job center saw the fastest home-price growth during the two-year periods ending in May in the years 2013, 2015, 2017 and 2019.
Fast-forward to two months ago, and it’s a different story. Home values in a neighborhood with a 70-minute commute jumped 30.2 percent, compared to a 9.2 percent gain for areas with a 20-minute commute.
The Zillow analysis found similar patterns at work in New York City, Los Angeles, Washington, D.C. and San Francisco.
Ed Pinto of the American Enterprise Institute’s Housing Center said he thinks the shift in demand will stick around, as many people can and will continue to work from home, regardless of the pandemic.
This isn’t the first time COVID-19 has helped shape home prices. As PYMNTS reported last year, wellness and the need for more space — coupled with historically low interest rates and an influx of people leaving cities — were key motivators for homebuyers in 2020.
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