From the NY Times:
WHAT is the real estate value of a one-seat train ride to Manhattan from a station close to one’s home in New Jersey? Leave it to statisticians to come up with a figure.
“It has to be a lot,” said Perri K. Feldman of Keller Williams Realty, who has built a client base in towns along a section of the New Jersey Transit Midtown Direct line running from Morristown to South Orange. “It’s the first question so many people ask about a house: ‘How close is it to the train? Can I walk to the station?’ ”
Now, the extra value that comes with proximity to a station with direct service to Manhattan — no transfer required — has been quantified: $19,000, on average, for homes within two miles of a station; $29,000 for houses within half a mile.
Home values would increase by those amounts in neighborhoods surrounding 10 New Jersey Transit lines and 2 Metro-North Railroad lines if a third rail tunnel under the Hudson River was ever built, according to a study by the independent Regional Plan Association.
Statisticians worked backwards, analyzing the impact on real estate value when previous rail-improvement projects were done, to project the impact that a new tunnel would have on home values.
The cumulative increase in property value would be $18 billion, according to the study, which was published two months before Gov. Christopher J. Christie of New Jersey decided to suspend work on the tunnel as of Oct. 7. Senator Frank R. Lautenberg, a tunnel supporter, has worked to publicize the findings.
Data from 45,000 area home sales that took place from 1993 through 2008 were analyzed. According to Juliette Michaelson, who performed that section of the research, the analytic process assumes that the price of a house is determined by the value of characteristics like number of bedrooms, quality of the school district and access to train service. By looking at thousands of sales involving houses with differing combinations of those characteristics, it becomes possible to estimate the amount that each individual characteristic adds to the price of the house, Ms. Michaelson explained in the notes accompanying the study.