This study analyzed whether the smart growth price premium embedded in single-family home prices established earlier in the literature is sustained over time. Prices of single-family homes in two smart growth developments were compared with comparable homes in surrounding conventional developments. Using the hedonic price methodology, approximately 30 control variables, and 4,744 actual single-family sale transactions in the years 1997 to 2005, a price premium of 16.1% and 6.5%, respectively, was found for the two smart growth communities. The price premium for the two smart growth communities is sustained or increasing over time, indicating a strong and sustained market acceptance of single-family housing units in smart growth communities.
While the study finds that homebuyers are willing to pay a premium for houses located in smart growth communities, there are several caveats:
Further research is necessary to address these issues.
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