Metro Magnetic: Pencilling How Much Commute Will Compute

The math of geography is one of our economy’s black-box mysteries of the moment. Nothing matters to business stakeholders in the world of residential real estate and construction as an answer to the question “where?”

Except, maybe, the answer – simultaneously – to the question, “when?”

The math of the geography gets tricky, dicey, and risky when answers to the one-word questions, “who” and “why” factor in. Fun, no?

The National Association of Realtors’

“The first quarter HBGI indicates that home building not only continued to overperform in lower cost markets like suburbs and exurbs, but also expanded the most rapidly for single-family and multifamily construction in areas with the shortest commutes,” said NAHB Chief Economist Robert Dietz.  “As workplaces increasingly adopt hybrid work models for roughly 30-40% of the American workforce, renters and buyers will have increased market power to minimize travel times and reduce both housing and transportation cost burdens.”

With a nationwide mean commuting time of 26 minutes, the latest HBGI shows that single-family home building was the highest in the top two (longest) commute quintiles, with a combined market share of 63.6%. Growth in the first quarter of 2021, however, was strongest in the bottom quintile (shortest commutes), with four-quarter moving average year-over-year growth rates of 22.2%.

In other words, while longer-commute areas have a much greater market share in single-family home building, the single-family construction growth rates in the first quarter of 2021 were strongest in the areas with the shortest commuting times.

People – the ones in households both in the throes of real estate’s seismic reactiveness to boom and bubble forces and ones trying to reasonably calculate their longer-term housing needs – are attempting to strike an intricate balance.

It’s the housing version of a broader work-life equilibrium, calculated for commute time, remote work options, and family priorities.

Land acquisition people have some difficult data threads to pick up, act on, and secure, all amidst one of housing’s noisiest eras in memory – including the bubble of the first decade of this Century.

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