Location, location, location as the mantra in real estate has never rung so true as it does in today’s market. With fewer and fewer new homes being built and builders trying to minimize losses on land they bought at premium pricing just a few years ago, times are tough.
According to a recent article in the Los Angeles Times, gas prices are only serving to sucker-punch homebuilders when they’re already on the ropes. How? The longer the commute, the less desirable the property, which makes outlying areas — where many builders have purchased land – even less attractive.
Commuters these days aren’t just adding up buying incentives and looking at great square footage offered by homebuilders to make their ultimate buying decisions. Instead, they’re calculating their expenses based on $4, $5, or even the possibility of $6 per gallon gas into their monthly outlay for a home. After all, the money they may save by buying a home for less money in an outlying area can be eaten up by driving expenses.
CNN.com reports a story about a San Francisco-based man who was ready to plunk money down on a house in Elk Grove, CA, about 85 miles away from work because homes are so much more affordable there. Instead, he added up his weekly commute expenses at the current $4.50 per gallon rate and figured he would be pumping an additional $550 a month into his tank. His decision? He made an offer on a home near an Amtrak train station in a town closer to work to cut his commuting costs.
CNN also reports that a survey of 900 Coldwell Banker agents showed that a remarkable 96% said that rising gas prices were a concern to their clients and that 78% acknowledged that higher fuel costs are increasing their desire for city living.
Who would have thought that in this world of globalization, we would end up taking lessons from our European brethren, who have endured high fuels costs for so long that they naturally factor in a transportation budget when buying a home?
Written by Dena Kouremetis for www.RealtyTimescom. Copyright