Pipelines may have their supporters and detractors, but one thing is for certain: They certainly don’t bring down the value of your home. That’s the key finding of a study done by Integra Realty Resources on behalf of The INGAA Foundation Inc. – the presence of an underground natural gas pipeline doesn’t affect the sales prices or value of residential properties.
For the “Pipeline Impact to Property Value and Property Insurability” report, IRR examined approximately 200 homes in five states up and down the East Coast, and the data shows that key fact was verified in every case. INGAA had previously conducted a similar survey in 2001, and the findings were the same both 15 years ago and today.
Let us explain how we conducted the survey, and then look at two case studies to showcase our findings.
Examining the data and crunching the numbers
First, experts from IRR examined home property sales from communities in Ohio, New Jersey, Virginia, and Mississippi that all were traversed or near natural gas pipelines (IRR also looked at data from Pennsylvania from another research group). Many of these pipelines were decades old but were serviced or replaced in the 2000s. Next, the experts crunched sales data in each area and normalized it by the most common significant factors (e.g. gross living area, size, age, date of transaction) in order to get adjustments that would put properties on an equal footing. Finally, IRR applied linear regression analyses to determine if any correlation existed between sales price and the location of the pipeline easement.
After reviewing all of the data and analyses, IRR found no negative impact on price and no correlation between price and proximity to pipeline easement in every research area. Homeowners in these areas were able to qualify for Federal Housing Administration and Veterans Affairs loans, and their ability to buy property insurance without increased premiums was not affected.
Let’s look at two study areas to better describe our methodology. The first area is outside Cincinnati, Ohio, where two suburban communities were traversed by natural gas pipelines Texas Gas Transmission pipeline and the Rockies Express (REX) pipeline (one 26-inch diameter pipeline, and a 36- to 42-inch pipeline). The price of one square foot in these two communities was approximately 3.75 percent higher than similar homes in Ohio communities not near a pipeline.
The second example is a master-planned, residential community in Prince William County, Virginia, which was developed in proximity to three existing Williams Companies natural gas pipelines. The data shows that even though it’s close to those pipelines, the community has a price per square foot 13.26 percent higher than other similar areas in Virginia.
The final takeaway
In other words, there’s no measurable impact on the sales price of properties along or in proximity to a natural gas pipeline. The size and age of the pipeline don’t affect sale prices, either. Our study was thorough, as we compared approximately 200 transactions in five states, and the data supports this finding in every community.
You can read the full results of the study, as well as more about our methodology and the communities we studied, at the INGAA Foundation’s website.