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CNN had a news piece today about how the swift rise of gas prices is already changing the way Americans live, leading to a "new urbanization". Basically people are moving closer to the City, job centers and transportation hubs. This is leading to falling home prices in the exurbs and distant suburbia.
Do you think this is happening in the Triangle? I can foresee the homes north of Falls Lake and even in Wake Forest becoming tougher to sell if this trend continues; with Garner and areas closer to the City gaining in value.
A secondary trend they noted is that the demand for larger homes is decreasing. A by-product of the increasing utility costs associated with these homes.
As if there are not enough things to consider when buying a home....now it seems we'll have to figure in the future cost of oil!
CNN had a news piece today about how the swift rise of gas prices is already changing the way Americans live, leading to a "new urbanization". Basically people are moving closer to the City, job centers and transportation hubs. This is leading to falling home prices in the exurbs and distant suburbia.
Do you think this is happening in the Triangle? I can foresee the homes north of Falls Lake and even in Wake Forest becoming tougher to sell if this trend continues; with Garner and areas closer to the City gaining in value.
A secondary trend they noted is that the demand for larger homes is decreasing. A by-product of the increasing utility costs associated with these homes.
As if there are not enough things to consider when buying a home....now it seems we'll have to figure in the future cost of oil!
$13 natural gas (twice what it was last year) is going to be very bad news this Winter.
I think I saw something like that on the news the other day, too. Makes sense to me! If I were buying a home now in this area it wouldn't be in an outlying suburb unless I worked in that area.
The cost of heating and cooling large homes is also going to be a big factor in the future. Plus, I think that people who are moving here to retire sometimes prefer smaller homes. Less to take care of.
Considering what some of the homes cost close to the employment and city centers, I don't see a lot of folks quickly selling and moving out of the 'burbs here. They simply can't afford to. Can you imagine what homes ITB would increase to if demand skyrocketed? In Western Cary?
People are being irrational in the face of this speculation-fed gas spike. Folks taking huge hits on late model SUVs/Trucks for instance. What happens when the bubble burst?
With all this happening, I couldn't be more happy with our decision to buy a house in the middle of everything (SE Durham/Brier Creek area) in favor of an outlying area like Holly Springs, Clayton, etc. Nothing's ever more than 20 minutes away it seems.
Gas prices will DEFINITELY have an impact on population dynamics and home values - if they continue to rise, low gas prices in the US are one of the major motivators for outlying suburban growth and one of the reasons why the US is so different from say, Europe in this regard.
Cities like Beaumont, CA would never have settled the way they did if gas had always been $4.00/gallon. For those of you not reading real estate news or unfamiliar with CA, imagine 10 major builders putting 2 golf courses and thousands of new 3000+ square foot homes in Rockingham or somewhere else 80+ miles away from RTP expecting that Park employees would snatch them up and trade the commute (time and money) for a bigger house.
Considering what some of the homes cost close to the employment and city centers, I don't see a lot of folks quickly selling and moving out of the 'burbs here. They simply can't afford to. Can you imagine what homes ITB would increase to if demand skyrocketed? In Western Cary?
But can they afford to stay? What if gas goes to $6 a gallon? At what point does the monthly commuting bill outweigh the lower cost of a more distant house?
The piece on TV showed a couple in CA (I forget which suburb but it was outside of LA) that were spending hundreds of $ a month on gas. They moved near the train station in Pasadena and now catch the train into LA every day. The reporter speculated that they were pioneers at the beginning of a major trend. Who knows? But I can't see the price of gas going down anytime soon.
Months and months ago, I posted about a book named "The Option of Urbanism" that I learned about late last year while listening to NPR one morning. I posted that the author predicted a trend toward more urban living and the decline of the outer exurbs. The latest rash of national attention over this very issue is based on the author of the book and Brooking's Institue Visiting Fellow: Christopher Leinberger. The book is an easy read and makes a very compelling story about the future while explaining how America was transformed into a driveable suburban landscape model following WWII. It links pent up demand for change associated with the malaise of the Great Depression and WWII with GM's Futurama exhibit at the 1939 NYC World's Fair to create the massive amount of momentum needed to move to the suburban model in the first place. It clearly was a brilliant move by GM and is arguably the most effective social engineering experiment ever conceived by a corporation.
The book also talks about how power and wealth are linked to a concept called the "favored quarter" where investment and infrastructure happened first and how this inequity was often drawn along economic and racial lines. Needless to say, it's a really interesting read.
In the end, it's amazing to me that with only 1 dollar movement in gas prices, his theories are being looked at more closely now then only 6 months ago when his book was released.
But can they afford to stay? What if gas goes to $6 a gallon? At what point does the monthly commuting bill outweigh the lower cost of a more distant house?
Seems like the average mileage on a car is around 12,000/year, or 1000/month. In a 30mpg vehicle, that is 33.3 gallons/month. So a $2 increase per gallon from 4->6 means $65/month more. You simple aren't going to find a comparable house ITB for that (even at current home prices).
If the bubble burst and prices fall below $3, you'll be especially glad you didn't move. If prices stay high, you are much better off getting a more fuel efficient vehicle down the road, telecommuting when possible, taking the bus when possible, etc. than moving. The 40 miles/charge electic/gas hybrids will be here in a couple of years. Better to eat the fuel cost now and then drastically lower your fuel cost then.
By the way, China (which was getting killed due to subsidizing prices) is raising prices, which will curb demand there. Oil was down today. There are lot of people in the market that are betting prices will fall.
Last edited by Dire Wolf; 06-19-2008 at 03:01 PM..
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