How High Fuel Prices Affect Home Prices

FUEL PRICES WILL AFFECT home prices.  The US has been through this before in the early 1970s when fuel was not available, or very expensive.  Sustained high gas and fuel prices DO affect home values.  This is what you can expect:

The further people commute to central work locations the lower the price of the home.  Homes within a 20 to 25 minute drive to central work locations, like downtown central cities, or central industrial areas will expect to pay slightly less for a home.  Home prices are really impacted in areas where there is a 45 minute or longer commute time to central work locations.  Bedroom communities for example like Tracy and Gilroy Silicon Valley or El Cajon in the San Diego area, these bedroom communities will be impacted the most by high fuel prices.  During the 1970s fuel crisis home prices fell 10% where homebuyers expected a 45 minute drive to and from work.

Second, home prices very near central work areas will go up, again, as much as 10%.  It is nice to walk to work, ride a bike, or take public transit a short hop to work.  Urban cities like Boston, Salt Lake, and San Francisco will benefit, and people will move to central cities.  It is more energy efficient!  May urban areas like New York it is possible to give up a car completely!  Nice.

These price adjustments due to driving time will begin to occur almost immediately.

The bad part of this is bedroom communities have already been hit hard with declining prices with the mortgage crisis, and the fuel crisis will exacerbate the price declines.

Over the long term there will be additional impacts of energy costs on home prices.  Energy sources compete with each other.  Natural gas, for instance, can be converted to LNG to burn in cars and trucks.  It is cheaper than diesel fuel or gas and people will convert their cars and trucks to LNG as well as veg oil, palm oil, and other bio fuels.  Your home energy costs will go up too!  And food.

Home energy audits are just around the corner for home buyers and sellers.

Ha!  I’m going Green.  I’m already Green!  Here are some tips.

It is healthy to buy a bike and use it.  Bikes burn calories.  I need to burn calories, so I’m pedaling to work.  Walk when you can.  Buy a motor bike or Vespa for personal mid-distance transportation.  Right now my Ford gets 26 mpg.  Not bad, but not good either. The ultimate vehicle is a hybrid getting 50 mpg or better, or something like Volkswagon Rabbit Diesel… 50 miles per gallon then burn veg oil which you can get free!  I win!!!

Ha!  Win going Green!

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