Several of the more doomerish commenters on peak oil sites such as The Oil Drum have been predicting that rising gasoline costs will eventually lead to the abandonment of some of the outer residential developments surrounding major cities. Simply put, people won’t be able to afford to make a 30+ mile drive into work everyday.
Such forecasts may or may not turn out to be true, but there’s evidence we have started heading in that direction:
Economists say home prices are nowhere near hitting bottom. But even in regions that have taken a beating, some neighborhoods remain practically unscathed. And a pattern is emerging as to which neighborhoods those are.
The ones with short commutes are faring better than places with long drives into the city. Some analysts see a pause in what has long been inexorable — urban sprawl.
The story gives examples of price trends in and around Washington, D.C. House prices away from the city have been falling, while those closer to the city center, or near public transit lines, have been holding their value, or even increasing.
David Stiff, chief economist for the company that produces the Case-Shiller Home Price Index, saw the trend in other cities, as well — including Los Angeles, San Francisco, New York, San Diego, Miami and Boston.
Stiff recently matched home resale values against commute times and found that in most of these major metropolitan areas, the trend is the same. The longer the commute, the steeper the drop in prices.
It’s something to keep in mind if you are house shopping. Easy access to public transportation will likely command a growing premium.