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What Metro Adds to Home Values

My first post-accident Metro ride was on Wednesday, two days after last week's horrible crash. As the train s-l-o-w-l-y pulled into the station, I felt sorry for the driver, who was practically alone in the front car. And then I joined the crowd boarding at the middle of the train. It seemed the logical choice, at least until investigators figure out what caused one train to crash into the back of another -- and how to keep it from happening again.

Now I'm wondering what would happen if our subway system -- for a long time so clean and safe that tourists saw it as a fun component of any trip to the nation's capital -- developed a lasting reputation as unsafe. Proximity to a Metro station adds real value to homes, especially if they're within walking distance. If Metrorail were to degenerate into just an old, littered, ride-at-your-own-risk subway, that premium could shrink.

What are your thoughts about Metro's contribution to local home values? Is the benefit diminished already?

By Elizabeth Razzi  |  June 29, 2009; 6:00 AM ET
Categories:  Buying , Home features , Selling , The market  
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Comments

I don't believe the value of the Metro should up the price of a home by that much.

Think back to before the boom and these absurd prices we still have in the metro area.

Condos were around 100K-125K, SFH around 200K in Arlington and the metro existed then. You lived in the suburbs and most houses cost about 25-50K less. Before the days of easy lending, a 300K house was considered a mansion. What changed...NOTHING but allowing millions of unqualified buyers and flippers into the market and millions of appraisers and scammers up'ing housing values to reap profits.

You obviously save some time by living in the city, but how much does metro save you vs driving and parking if you still lived in the city? Is saving $100-200 a month worth a price tag of $25K more? hardly. You'd have to live there for almost 10 years to break even on that and we know most don't live in an area that long anymore.

This whole area's home values need to be re-looked at with a magnifying glass. With all the new condos being converted to condos, there obviously isn't any demand (and most of the condo people are the ones that ride metro)...and we're seeing more and more SFH foreclosures and empty homes in the Arlington area (Lyon village, etc).

Posted by: cavatellie | June 30, 2009 2:23 AM | Report abuse

Elizabeth, *surely* you must have some kind of data and statistics about the difference in value of comparable homes when there's a metro station nearby. Find them and post them! You run a *real estate* blog.

As far as cavatellie's naive post, keep in mind that the additional monthly payment on an extra $25,000 *is* $100-$200/month, so that sounds like a decent, back-of-the-envelope estimate for the premium that proximity to the metro should command, per resident for the size of the unit you're purchasing.

Also, cavatellie has never tried, as I have, to drive from downtown Silver Spring to Union Station. It's definitely worth the extra money to live near the metro so that you don't have to drive downtown.

Posted by: constans | June 30, 2009 1:23 PM | Report abuse

Unfortunately I have driven in it..and it's not that bad. I also use to drive in from Crofton to Arlington, it took 50 mins...time it took to take the orange line to arlington, 50 mins. Didn't save any time what-so-ever.

See the thing is $25,000 7 years ago was a lot of money...but I forgot everyone is made out of money these past 7 years since it was growing on trees.

Everything was de-valued...well that's changing now...

Posted by: cavatellie | July 1, 2009 1:54 AM | Report abuse

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