Tuesday, April 22, 2008

The New York Times says...

...the great mix-and-match of the next phase of the housing crisis has begun, as properties near mass transit lines are much sought after while values in the burbs continue to tank (there's an "I told you so," by the way).

UPDATE: location, location, location!
Housing Prices Drop Lower as Commute Distances Rise
Posted by: Nate Berg
24 April 2008 - 7:00am
Homes farther out from the central city and with longer commutes are being hit harder by the downturn in the housing market. Those located close to city cores and transit are faring better, according to this report from NPR.

Original post:

The New York Times
April 22, 2008, 9:36 am
Suburbs Are Hurting From Birth Rates and Gas Prices
By Daniel Hamermesh

...Part of the change in demand, though, has come from the big increase in gasoline prices. High gasoline costs increase the cost of living far from downtown, so the demand for suburban housing drops.

Especially strong evidence for this effect is provided by a comparison of housing prices near D.C. Metro stations. In the suburbs, those prices have fallen less than average, while within the District, house prices near stations have risen more than average.

As Kunstler reminds us that we knew it was coming...

Farewell to suburbia
Car-dependent communities, the greatest misallocation of resources in history, have no future -- but that's just one of the shocks the global oil crisis is going to bring
James Howard Kunstler, Citizen Special
Published: Saturday, April 19, 2008

The fog of cluelessness that hangs over North America about the gathering global oil crisis and its ramifications seems to thicken by the hour. One reason for all the fog is that the key part of the story is so broadly misunderstood -- namely, that it's not about running out of oil; it's about how the complex systems we depend on for everyday life begin to destabilize as the global demand for oil starts to outstrip the supply.

By "complex systems" I mean very precisely:

- the way we produce and distribute our food;

- the way we do commerce and manufacturing;

- the way we move people and things around the landscape;

- the way we accumulate and deploy capital investment;

- the way we get and allocate energy resources (i.e. the oil markets themselves);

- plus many other activities such as education, medicine, governance, and so on.

All these systems are visibly wobbling these days, and mutually reinforcing each other's instabilities, multiplying and accelerating our problems. For instance, our ventures in bio-fuels are affecting worldwide grain prices so severely that food riots have broken out in several poor countries. Whoops! Bitten by unintended consequences...

...The new reality of the oil situation informs us that we will not have the energy to run this automobile-dependent infrastructure for daily life. The material assets of suburbia are destined to lose both their monetary value and their sheer usefulness as 100-kilometre daily commutes become economically insupportable, not to mention the cost of heating 3,000-square-foot houses...

...I think the stark truth of the matter is that no combination of alternative fuels will allow us to run the North American highway network, Wal-Mart, and Walt Disney World -- or even a substantial fraction of those things. Because of our sunk costs in Happy Motoring, we will surely try everything -- solar, wind, nuclear, bio-fuels, used french-fry oil -- and we will surely be disappointed by what they can actually do for us. The problem is that they don't scale...

...Right now, with transport, finance, and food production in disarray, we have entered the period of history that I call "the long emergency." Despite the techno-triumphalism rampant among our governing classes, we are not likely to see (nor are we entitled to) an orderly transition from where we are now to where we are heading. We are unlikely, for instance, to "come up with" a miracle rescue remedy for motor transport. We will have to confront the sheer loss of capital that is at the heart of the financial fiasco rather than continue to play a shell game with loans from central banks to cover up for failed securities. The crisis in grain prices is an early warning that our current methods of food production are hostage to the petroleum markets...

Which brings us to the post right below this one.

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