Monday, June 23, 2008

More signs the great re-shuffle is beginning.

The Boston Globe
House hunting in the age of $4 gas
Analysts say commuters may move closer to work
By Noah Bierman and Kimberly Blanton
Globe Staff / June 22, 2008

...If gas prices continue their inexorable rise, commuting costs will become a
critical factor in where people choose to live. The first dramatic changes
would probably occur for those in isolated suburbs and exurbs. "When gas
was cheap, it was financially possible to live out in the outer reaches of the
suburban ring and commute in," said Mark Zandi, chief economist for
Moody's "That's where we'll see the largest impact..."

...A May study by CEOs for Cities, a research organization supported by government and business, said rising gas prices would push new housing developments closer to the urban core in Boston, Seattle, and other US cities, while suburbs with few transit options will lose value.

The dropoff you see in the chart above, which accompanied this article, shows the effects of people who have cut back drastically on non-essential driving and those who were smart enough to move near mass transit in the last couple of years when the writing was first obviously on the wall. It also includes, of course, those households who have been priced out of the gasoline market and are simply getting by as best they can, catching rides with friends and neighbors or carpooling.

...Economists and housing analysts said there is no specific level at which gas price increases will prompt people to move. Instead, as prices rise to attention-getting levels - up, say, 50 cents or a dollar - more people will reexamine their living situations.

But moving isn't necessarily the right answer, especially now. The outlying communities where commuting costs are hitting hardest are also experiencing a larger decline in real estate values. Closer-in communities have fared better in the slump. For those looking to relocate, that would mean less money for the home they're selling and more money for the one they would buy...

That's an "I told you so," class.

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