Inflation + Gasoline Prices = Higher In-City Values?

[Riick]

Gas prices UP, General inflation UP.
How do you think this will affect demand, and thus Market Values for homes inside larger cities, and close-in suburbs?

BTW.. lived 99% of my life in East-Coast megapolis, I'm very curious about what people from other parts of the U.S. have to say.

 

[Lloyd Bonafide]

In San Diego County, outlying areas are currently being hit harder with more price declines.

In Los Angeles County, apparently the same thing has happened:

http://calculatedrisk.blogspot.com/2008/05/housing-bubble-and-bust-tale-of-three.html

During the housing bubble, as home prices appreciated at record rates in many metro areas, housing market activity was pushed outward to distant suburbs and ex-urban areas. Many homebuyers, who could no longer afford to purchase homes close to urban centers, were forced to “drive until you qualify” – trading longer commutes for lower mortgage payments.
...
Because of the reversal in trends that boosted demand for housing in outlying suburbs, since they peaked in 2005 and 2006, home prices have generally fallen more in towns and neighborhoods located farther away from urban centers.

 

[Randolph Kinney]

It sure looks like the farther outlying areas from city centers are hardest hit with price declines.

 

[Riick]

Wonder what the radius is going to turn out to be-- in gallons.
Over 1 gallon away (one-way) and prices fall-off? Over 2 gallons??

For office commuters, around here you can buy a monthly rail pass to get to nearest large city -Philadelphia- for roughly $8/day.
Distance, Round-Trip, is roughly 55 miles, with no wear & tear on car or commuter, & no parking fees (not cheap) in the City.

 

[Restrain]

Yes and no. The problem is that the cost of urban housing may well exceed any savings in fuel. I think you're going to see more innovative employent terms, such as 4-40 work weeks, telecommuting 1-2 days a week, etc. It will cut down on office costs (lower light bills, etc) while keeping employees happy.

 

[murray stroupe]

Changes in the news

Yes and no. The problem is that the cost of urban housing may well exceed any savings in fuel. I think you're going to see more innovative employent terms, such as 4-40 work weeks, telecommuting 1-2 days a week, etc. It will cut down on office costs (lower light bills, etc) while keeping employees happy.

=================
Another change,the king @ GM today said he thought the shift away from gas hogs is permanent, & shut down 4 auto manufacturing plants.[Paraphrase]

So 1 gallon or 2 gallons guidelines,maybe right, but the milage probably averages up.

 

[Scott Kibler]

Used to be, and still is in many cases, that the city centers were home of the low income/high crime areas and the further out you went, generally the nicer the neighborhoods.

It appears the trend recently is the revitalization and repopulation of these inner city areas with more affluent residents thus pushing the lower income types further away. High transportation costs will only accellerate this trend. This is certain to be a big problem in the future as, unlike the former inner city slums; the exurb slums will not be proximate to major employment centers or transportation links.

I recall watching the news about the riots in France a year or so ago and the impression I got was that there, the low income areas are all in suburbs away from the city centers. I suspect the Europeans are already at this stage due to historically higher fuel costs and greater reliance on rail based transportation.

 

[Terrel L. Shields]

the king @ GM today said he thought the shift away from gas hogs is permanent

They said that in 1974 and look what happened. The obituary for the V-8 motor is likely still premature. The problem is that GM & its ilk failed to see the obvious and they should have had economical engine designs ready to drop in when demand changed. They are still 2 years from any serious effort to economize.

 

[moh malekpour]

I recall watching the news about the riots in France a year or so ago and the impression I got was that there, the low income areas are all in suburbs away from the city centers. I suspect the Europeans are already at this stage due to historically higher fuel costs and greater reliance on rail based transportation.

On the contrary, French have made a large investment in public transportation. Paris has one of the best public transportation systems in the world. Metro trains run every few minutes and from anywhere in Paris. you are never more that 400 meters from a Metro station.
They put heavy tax on gas purchase to discourage people from driving cars the same way we put tax on Cigarettes to discourage smoking. I think it is a good policy when they have an alternative for people to use but if the gas price gets to $5 per gallon here in Southern California, we are going to have a crisis because without a car we cannot go anywhere.

 

[Riick]

Used to be, and still is in many cases, that the city centers were home of the low income/high crime areas and the further out you went, generally the nicer the neighborhoods.

It appears the trend recently is the revitalization and repopulation of these inner city areas with more affluent residents thus pushing the lower income types further away. .......<snipped>

I'm reminded of what I've read about the early 1950's urban planners.
They forecasted a donut theory - the tasty suburban part surrounded a hole: The inner-city slums.
But their forecasts were based on the cheap gasoline and phenomenal growth of Suburbs in early 1950's (Think: Levittown over 18,000 homes - 1 builder, essentially 1 subdivision LINK).