Baseball Season 2013: Are Homes Near Stadiums Worth More?
Editor's note: Jed Kolko is the chief economist for online listings site Trulia. This article originally appeared on the Trulia Trends blog.
Baseball's 2013 season began Sunday night, when the Texas Rangers lost to the Houston Astros. Most other teams kick off the season on Monday. To mark the annual start of America's national pastime, we looked at home prices in the neighborhoods near major-league stadiums.
If you want to live close enough to the ballpark to hear the crowd and see the lights from home -- and of course, walk to the game -- it'll cost you. We examined asking home prices from the past year on Trulia in the neighborhoods within a mile or two of each stadium (excluding Toronto). It costs most to live near AT&T Park, home of the San Francisco Giants: $653 per square foot. Living near Atlanta's Turner Field or Kansas City's Kauffman Stadium costs only one tenth as much:
Note: median price per square foot in the neighborhood approximately one or two miles around the stadium. Final column is the ratio of stadium-area median price to metro median price. Values above 1 mean the stadium area is more expensive than the metro area overall.
It's no surprise to see that California stadiums are in more expensive neighborhoods, right? San Francisco, for instance, is expensive almost everywhere: even the cheapest San Francisco neighborhood would give sticker shock to Kansas City or Atlanta residents.
So to even out the playing field, we also looked at which stadium neighborhoods are expensive relative to the surrounding metro area. Of the 29 major-league stadiums excluding Toronto, 20 are located in neighborhoods that are more expensive than the average for that metro. That means the stadium area price relative to metro price is greater than 1. The Fenway Park neighborhood is 2.6 times as expensive as the Boston metro area overall -- making it more relatively expensive than San Francisco's AT&T Park, which is only 1.3 times as expensive as the San Francisco metro overall. Cincinnati, in fact, has the most expensive stadium neighborhood relative to the metro area, at 2.8x.
The most expensive stadium neighborhoods relative to their metros are in or near downtowns. In contrast, stadiums in neighborhoods that are inexpensive relative to the metro area tend to be at least a few miles outside of downtown. Yankee Stadium, for instance, is in the Bronx, six miles from Grand Central Station, and in an area that's much cheaper than the typical New York metro neighborhood. At $198 per square foot, homes near Yankee Stadium may be expensive relative to most of the country, but they're inexpensive compared with the rest of New York.
It Costs More to Live Near a Winner
The most diehard fans might want to live next to the ballpark no matter how the team is doing, but if you'd pay more to live near a winner, that's good -- because you might have to. Based on the odds that bookies are offering on the 2013 World Series, the teams with a better shot at the championship play in more expensive neighborhoods -- though the correlation isn't strong. (We looked at oddschecker.com, a British website that aggregates odds from multiple bookies, and took the most favorable odds for each team minus the extreme values.) Using this method, the team with the best shot at winning the 2013 World Series is the Washington Nationals, followed by the Los Angeles Angels. For instance, the odds for the Angels winning are 9-to-1, which implies a 10% likelihood that the Angels will be this year's World Series champs. Here's the scatterplot of (1) each team's chances of winning the World Series and (2) home prices in the neighborhood around the team's stadium, with the upward-sloping line showing the positive (but weak) correlation:
It costs a lot to live near the Nationals, Dodgers, and Angels, but maybe it's worth it since they're expected to do well this year. However, you'll pay the same premium to live near the Red Sox, Padres, or Mariners -- but with a much lower chance of seeing and hearing a World Series victory from your roof deck. That's an expensive way to get a lot of disappointment, if the bookies are right. However, at $110 per square foot, living near the Detroit Tigers' Comerica Park is a much cheaper way to be walking distance from a potential 2013 World Series winner.
Cheer for Your Team, Not For Your Home Value
Is buying near a stadium a good real estate investment? Many academic studies, summarized here, have looked closely at the impact of new stadiums on wages, property values, and other economic indicators, and the results are mixed. New stadiums often have a disappointing impact on local economies, though they often end up raising nearby home values and rents. Since new stadiums don't open that frequently, we looked instead at whether home prices rise in seasons when a baseball team wins more games?
Sorry, stadium-neighbors: the answer is no. Home prices near stadiums don't rise more in the years that a team wins more games. (Technical note: we use panel regression with a team fixed-effect and controlled for metro-level price changes.) Living near a winning team may bring you happiness and bragging rights, but it won't raise your home values. There are lots of reasons to cheer for the home team if you live near the ballpark–who wants a bunch of grumpy fans walking around your neighborhood after the game?– but the effect on your home's value isn't one of them.
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