No doubt you’ve heard it repeatedly: your home may be the biggest investment you make in your lifetime. Sadly, most homebuyers don’t keep that in mind during the purchase process. Instead, it is all about emotions -- the sexy staircase, the über-cool kitchen and the to-die-for flooring. Seldom are we asked how to know if a home will hold its value, what factors into determining a home’s future value and how to shop for a home that will eventually make the buyer money.
While the answers to these questions are complex, some predictors of future value are obvious:
- Market variables
One must dig deep into even these obvious factors to find the “nuggets” of needed information. For instance, a spate of relatively recent studies shows that homes near a Walmart, Target, Whole Foods or Starbucks hold their values better than homes further away, homes in very close proximity to a cemetery are typically valued higher than those several blocks away (it’s true!) and homes near a high-performing school are worth more than those near a substandard school.
The flip side shows that homeowners in a neighborhood in which a sex offender lives will see their homes’ value remain stagnant or even plummet, as will those in neighborhoods with foreclosures.
Upgrades are tricky as well. If you over-improve your home, in comparison to your neighbor’s homes, you may actually lose value.
All else being equal, however, location rules the day when it comes to the valuation of homes. And, according to study by CEOs for Cities, “. . .houses located in areas with above-average walkability or bike-ability are worth up to $34,000 more than similar houses in areas with average levels.”
I wish I could take credit for that subhead, but it comes from a colleague in Northern California. She coined the term to refer to the surge in property values that accompanies the decision of municipalities to include bicycle-friendly amenities in their planning. These include bike lanes, trails, bike-sharing programs and more.
Thankfully, Madison is among the country’s best when it comes to ensuring our city is not only bike-able but walkable as well. In fact, we’ve won awards for our “active transportation” friendliness.
Most bike-able and walkable neighborhoods in Madison
The City of Madison boasts a respectable walk score of 48 but an even better bike score of 73. The city provides numerous amenities as proof of our bike-friendly environment. Our favorite is the Madison BCycle bike share system. For only $6 you can rent a bicycle for 30 minutes. If you purchase a monthly pass you’ll only pay $15 for $60 minutes of trip time. They also offer an annual pass and discounts for UW-Madison students. Learn more about the program online at Madison.bcycle.com.
The city also provides bike racks throughout the downtown area, UW campus and in all City parking ramps. Then, there are the Bike Boulevards -- low-speed, low-traffic local streets “designated for use primarily by bicyclists,” according to city leaders.
The most walkable/bike-able neighborhoods in Madison, according to walkscore.com, are State-Langdon and Vilas.
While primarily known for its historic homes, State-Langdon is largely populated with tenants (only 4 percent of the residents own their homes). The good news is, however (if you are considering purchasing a home here), that homes are valued at 123 percent above the average home price for the state. The average list price of a home in State-Langdon is $392,500 – a testament to the idea that homes in bike-able neighborhoods hold their value better than those located elsewhere.
So, what makes State-Langdon so bike-able? Living here allows for quick and easy access by foot or bike to the Lakeshore Path, which runs through the Lakeshore Nature Preserve. Of the two trail segments, the Lake Mendota Path and the Howard Temin Path, only the latter allows bicycles. But it’s a popular ride and can take you not only to a peaceful commune with nature, but on routine errands as well.
There is no guessing necessary when it comes to the answering the question about why Vilas is one of Madison’s most bike-able neighborhoods. It’s is home to Monroe Street, where you can bike or walk to get your shopping accomplished and an entrance to the UW Arboretum in the neighborhood provides easy access to the six-mile trail around Lake Wingra.
Here you will find fabulous historic homes in a variety of architectural styles, situated on tree-lined streets and inhabited by a diverse mix of singles, couples and families. Many students live in the area as well.
The average home price in Vilas is nearly $470,000, which is 168 percent more than Wisconsin’s average.
How does being bike/walkable raise home values?
Half of U.S. residents claim that walkability and bike-ability is a priority when they are considering where to live, according to a 2015 report published by the Urban Land Institute. It only makes sense then that a large number of homebuyers are seeking walkable and bike-able neighborhoods. Homes in in-demand neighborhood are naturally going to be valued higher than those located in less popular areas.
The Urban Land Institute’s study cites Indianapolis as an example in the report. Homeowners located near the Indianapolis Cultural Trail, popular with bicyclists, have seen their home values rise an astounding 148 percent since the trail opened six years ago. In fact, homes located within a quarter-mile have increased in value an average of nearly $70,000, the report says.
Add to this the fact that the report also finds that 63 percent of millennials long for a neighborhood where they can park the car and let it gather dust, and this group of Americans constitutes the nation’s largest buyer pool, a bike-able or walkable neighborhood is naturally in high demand.
While purchasing a home in a city ranked consistently on various “most 'bikeable' cities in the nation” lists is smart, choosing a Madison neighborhood proven to be a bicyclist’s paradise will help ensure that your home holds its value in the years to come.