The Effect of Walkability on House Prices

Abstract

Using nearly 20,000 single-family house transactions for Orange County, California, we analyzed the effect of walkability of properties on their closing prices. We found that walkability does not have a noticeable effect on prices at an aggregate level. However, after splitting the data according to the number of garage spaces, we found that for houses with zero to one garage space, walkability had a positive impact on prices; for two-car garage properties, the walkability effect was negligible; for properties with three or more garage spaces, the effect became negative and statistically significant. So a high walkability is a valuable amenity for small houses with up to a one-car garage, but a disamenity for larger homes with three or more garage spaces. We further examined whether the impact of walkability on prices was nonlinear and found that nonlinearity existed for houses with two or three garage spaces. Our findings of the effect of walkability on prices have practical implications for real estate stakeholders.