Thursday, July 25, 2013

Sellers: Stay One "Strike" Ahead of Commuters

Good marketing of a home (or any property) for sale should include information about the area and relate to a potential buyer. It's too bad that most of what is out there does not.

One example of this is attracting a "commuter" to a home located within close proximity to a commuter train station. Before you attempt to sell, you should know how close your home is to a commuter train station, whether you personally use it or not.

With gas prices continuing to gouge consumers, a few dollars more in the mortgage could actually SAVE money to a commuter who drives a long distance each day. But that potential buyer won't know that if YOU don't point it out to them.

My long-time readers may recall my column a couple years back about Chicago area research showing a higher home price value of homes specifically located near the main commuter train line. On that same point, a similar column was recently published about proximity to the BART (Bay Area Rapid Transit) trains in the San Francisco Bay area, and its impact, especially right now due to the most recent transit strike.

Maxime Rieman of has provided us with an overview, which is reprinted with her permission:

A 2013 study commissioned by The American Public Transportation Association concluded that close proximity to a fixed-guideway transit system, those like BART, correlated with stable property values during the Great Recession. The study, entitled "The New Real Estate Mantra: Location Near Public Transportation," also found that while homes near commuter stations may command higher prices, they also help the owner save immensely on transportation costs. These factors often add up to a higher demand for real estate in close proximity to commuter lines.


However, there is a downside to living near public transit and, according to the Center for Housing Policy, it comes in the form of "nuisance effects." A particularly loud public transit system, for example, can negatively impact the value of residential property, as can pollution from fumes. But nuisance is often, though not always, outweighed by convenience and mobility; a young person wanting to commute safely to nightlife may fare better living closer to a light rail station, and put up with the noise that may come with it, rather than living in a far-removed suburb.


But these factors don't include strikes—and there's a reason: they're too infrequent and they don't last long enough.


So when would a strike actually affect a local real estate market? Well, there are a variety of answers, but the most obvious one is if the strike were to last months on end, if not for years—an unlikely scenario. More likely, however, is if there is a culture of labor strikes in a given area with transit—like there is in the San Francisco Bay Area. If such a culture exists and strikes become an all too common occurrence, the value of real estate surrounding public transit, both commercial and residential, will likely taper-off if only by a little bit. Again, this is hypothetical: even in the Bay Area there hasn't been enough public transit strikes to show a direct effect on the value of nearby real estate—it may marginally add to the cost of living, and, depending on the success of the strike, to what you pay into local taxes, but it won't have as big of an impact as, say, the number of housing units available.


And the number of housing units available is determined by demand. The Bay Area doesn't have one of the strongest real estate markets in the country without reason: there is a high demand by people in and wanting to be a part of the tech industry, because of the local culture, direct access to various industries and inherently, the well-paying jobs.


Oakland is a great example of this phenomenon: the city has one of the worst police forces in the nation (now being directly watched by the federal government) and a huge crime problem. The city shares BART with San Francisco, and it has its own public transit system AC Transit, on strike. But the real estate market is growing. The reason: cheaper real estate compared to San Francisco and Silicon Valley, direct access to what smaller tech firms need and a growing industry.


Now all this isn't to say that transit strikes don't have an impact. They do. The BART strike alone is estimated to cost the local economy nearly $200 million. But strikes—impermanent and sporadic—have a far smaller impact on the value of long-running real estate market. Strikes, unless they signal a large cultural shift, have little impact on the value of homes.


(Maxime Rieman is a writer for NerdWallet, a financial literacy site that can help you find insurance company and other helpful consumer information.)

 Since we have readers from around the country, chances are the majority of you are not impacted by transit strikes such as the Bay Area is going through. The point here is the significance of selling a home with a "location location location" convenient to commuter transportation.
For those that do not live convenient to commuter trains or buses, information such as this means you should be ready to show potential buyers how other advantages and amenities your home provides would outweigh "commuting advantages".

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