Seattle Commuting Costs: Sacrificing 15 Minutes Can Save Thousands
- The value of a typical Seattle metro home that is a 15 minute commute from the city center is $962,000, compared to $632,000 for the same home located a 40-minute commute away.
- Homes in Seattle with peak commute times less than 20 minutes cost 40 percent more per square foot than a typical home with a 20-40 minute commute. This holds for both car and transit commutes.
- Renters with commutes under 20 minutes pay about 34 percent more per square foot than those with commutes between 20 and 40 minutes, for both commute types.
Commuting ranks among the least pleasant aspects of modern life. If you’re wincing even now thinking about your evening drive or train ride home, consider: How much would a home in a location offering a shorter commute end up costing you? In Seattle, the answer is quite a lot.
Seattle commuting costs amount to much more than the price of gas or a monthly bus pass. Buyers of a typical Seattle-area home should expect to pay a 7.5 percent premium for a home five minutes closer to downtown during rush hour. At Seattle’s current median home price of $468,000, that’s an extra $35,000. Put another way, a typical Seattle house might sell for $962,000 if it came with a 15-minute rush-hour commute, but only $632,000 with a 40-minute commute.
The median Greater Seattle home located in an area where it takes about 15 minutes to drive downtown during peak commuting hours is about 1,260 square feet and is worth more than $750,000, or about $585 per square foot. Those willing to endure a longer commute – about 50 minutes by car – can expect to get a lot more house for their dollar. The typical home in those areas is worth about $576,000 and is almost 2,000 square feet, roughly half the size-adjusted price of more commute-friendly homes. The same 1,260-square-foot home that is so valuable for being so close to work would be worth less than $500,000 if it were 50 rush-hour-commute minutes away instead of 15.
Still, those Seattle commuting costs savings do have a cost of their own: 35 extra minutes spent commuting one way (or 70 additional minutes, total, per two-way commute) means about 17,500 minutes, or 12 full days, of bonus commuting over the course of a year. Over a 30-year career, this adds up to almost precisely a full calendar year spent commuting.
Trading Spaces
The size of these differences is dramatic, but the trend is typical. People value their free time, and many are willing to pay a premium if it means fewer hours behind the wheel. The price gradient is steeper because of basic geometry: There’s more land available to build on as one travels farther from a city center, so housing built on central land gets bid up quickly as cities grow.
This generally results in a trade-off, not just between commute times and home prices, but living space. Near the city center, in the area where car commutes are under 20 minutes at peak, the median single-family home is about a third smaller than the median for the metropolitan area as a whole (1,260 square feet versus 1,830 square feet).
Of course, not everyone drives to work – overcrowded busses and missed trains can be equally… unpleasant. And the same general patterns observed with drivers persist when examining commute times and home values for riders of public transit. Homes with a transit commute under 20 minutes (typically condos) are typically priced around $690 per square foot, 40 percent more than homes (typically single-family) with transit commutes between 20 and 40 minutes. Across the metropolitan area, a 5 minute decrease in transit commute time was associated with a 4.2 percent increase in home price, holding car commute time constant.
And, similar to their car-commuting peers, those extra housing costs for transit-averse commuters are associated with less home: In the under-20-minute band, the typical home is 865 square feet, less than half of the metro-area median of 1,830 square feet.
Seattle Commuting Costs for Renters
Finally, not everyone owns a home – and renters seem to enjoy a somewhat better bargain in the Seattle commuting costs game. Across the Seattle area, 5 minute decreases in car- and transit-commute times were associated with 3 percent and 1.3 percent increases in rent for otherwise similar apartments, respectively. Still, quick commutes aren’t cheap: rents per square foot were about 34 percent higher for units with the shortest commutes (under 20 minutes), relative to units with 20 to 40 minute commutes.
Consumers (on the margin) highly value a short commute, and are willing to pay for it. All of the Seattle-area single-family homes and condominiums analyzed have a combined value of about $641 billion. If peak transit- and car-commute times were each reduced 5 minutes for every home in the city, the total value of all these homes might increase by $76 billion. This (highly speculative) figure represents not just an increase in wealth, but the willingness of residents to trade off spending on other goods for less time behind the wheel or on the bus.
Methodology
We teamed up with HERE Technologies[1] to estimate peak commute times[2] to Seattle’s downtown from every home in the metro area, then matched those data with Zillow’s database on individual home sizes and estimated home values (Zestimate) or rents (Rent Zestimate). Next, we grouped these homes into bands by commute time (for both car and transit commutes)—zero to twenty minutes, twenty to forty minutes, forty to sixty minutes, and more than sixty minutes—and characterized the typical home in each band. Finally, we estimated a model to compute counterfactuals: how much would these homes cost if they came with a shorter commute?
[1] About HERE Technologies: HERE, the Open Location Platform company, enables people, businesses and cities to achieve better outcomes by harnessing the power of location. The company has nearly 100 Seattle-based technologists that are among 8,000 employees across the world. Investors in HERE include Audi, BMW, Bosch, Continental, Daimler, Intel and Pioneer. To learn more visit http://360.here.com and www.here.com
[2] HERE aggregates billions of anonymous location measurements from more than 100 different sources, including intelligent car sensors, to calculate how traffic conditions change throughout the day. Advanced routing algorithms, incorporating both real-time and historical traffic data, are then applied and made available via API on the HERE Developer Portal.