The all-important commute – what it means for home values…

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How important is the commute to NYC?  VERY important!

When I take a buyer client out for the first time, one of the first questions they ask is “How is the commute to Manhattan?”

Now, that is a fairly standard question for a home buyer with a job in Manhattan. But here’s the twist: Almost ALL home buyers are asking me this question whether they have a city commute or not. This marks a shift in behavior from the pre-recession days when home buyers would ask the question only when it was immediately relevant.

The nature of work has changed…

Nothing stays the same, but I believe that this change is a major shift that is going to influence housing prices for some time to come. It is a change that reflects the uncertainty and tenuousness of 21st century economy as well as the shifting sands that employees seem to be standing on in increasing numbers. It is also a change that will impact all locations that are near a major metropolitan hub.  This isn’t just a New York story.

We are in a market where solid meat and potatoes jobs with decent salaries and benefits like health care have become rare jewels. McJobs have proliferated, but you can’t support a family or own a home as an Uber driver or a clerk at Stop and Shop.  Access to the lions share of the remaining “real jobs” means having access to Metro-North.

Another thing which has changed is that our work days are not determined by the clock. People are putting in 10, 11, 12 hour days. Weekends are also a thing of the past. Once again, easy access to Metro-North is key to making these crazy hours at least somewhat workable.

The housing recovery is partly linked to Metro-North…

The Westchester housing market has many issues impacting general pricing trends.  But at the top of the list are two items, the school district and access to Manhattan.  I would actually submit that the school system frenzy is overdone. But the influence of the Manhattan commute is probably underrated.

The following numbers are based on the Hudson-Gateway Multiple Listing Service (HGMLS) data:

Rockland County:

Rockland County has Metro North access via Tarrytown. The only problem is that you have to cross the Tappan Zee Bridge to get there. During rush hour that can be an agonizing commute before you even start your commute to NYC. Median home values for Rockland were $425,000 for 2016. That’s still 12% below the pre-recession highs.

Westchester County:

The median price of a home in Westchester was $624,000 in 2016. For the entire county, this is 9% below pre-recession prices. The price differential between the counties is currently is 32%. One wonders what that difference would be if Rockland had its own version of Metro-North?

But let’s also look at upper vs. lower Westchester.  Metro-North service extends to upper Westchester, but the commuting time is naturally a good deal longer. The median price for a home in lower Westchester was $710,000 in 2016. For upper Westchester, that price was $535,000. Still significantly higher than Rockland, but 25% below prices in lower Westchester. Further, the lower Westchester market has largely recovered from the recession (median price is just 2% below pre-recession values) while upper Westchester is 14% off their pre-recession prices.

What does this mean going forward?

Home buyers need to be mindful of the commuting issue.  For those who would rather not have so much money invested in a home, and for whom the commute is not an issue, upper Westchester is a great choice. It leaves you close enough to Metro-North to enjoy the city and what it has to offer while keeping costs down or allowing you to afford a bigger home.  Certainly areas further up the line are just getting their mojo back, so appreciation should be fairly strong for someone purchasing today.

For those who are wedded to their jobs and who commute or think they will be commuting, paying careful attention to Metro-North access and schedules is important. The recovery in lower Westchester has been somewhat uneven and there are still communities where prices haven’t soared. Some of these areas offer excellent opportunities for home buyers who are concerned about easy access to NYC.

For more information on the commute to Manhattan from lower Westchester here is a very informative link: The Westchester Metro-North Commute to Grand Central Station.

© 2017 – RGHicks – https://thewestchesterview.com – All rights reserved.

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