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Driving Down Real Estate - Will higher commuting costs kill

 
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Joined: 14 Jul 2007
Posts: 0
Location: Greater Boston

PostPosted: Tue Jul 01, 2008 1:15 pm GMT    Post subject: Driving Down Real Estate - Will higher commuting costs kill Reply with quote

Use this forum thread to discuss the following link.

Description: Driving Down Real Estate - Will higher commuting costs kill the suburbs?
URL: http://www.newsweek.com/id/144114
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=1783

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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Tue Jul 01, 2008 5:01 pm GMT    Post subject: Reply with quote

If someone drives 35 miles to work, works 20 days a week and gets 20 mpg, the delta from $2.5 per gallon to $4.5 per gallon is approx. $140 per month more.

$140 dollars per month equates to about $25,000 in house price with today's mortgage rate. So, the affordability reach just dropped.

If someone buys an old drafty house in the City, they will pay a premium for heating oil for sure. Homes built 35 miles from the city tend to be newer with a better insulated building envelope.

My advice is to ask the sellers for receipts for the heating oil and see how long a tank got them through, and then run the numbers at the new price per gallon.

So take this town, Halifax: click on the transportation

http://www.bestplaces.net/city/Halifax-Massachusetts.aspx#8

It says approx. 38 minute commute, I average that to be about a 22 mile commute average, approx. 528 gallons. From $2.5 to $4.5 per gallon would be an increase of $88 per month. That gas price is going to eat about $14,000 in house price affordability reach due to gas (automobile) prices in my estimation.

In trying to find this information, I stumbled on this link, which is great (provided the data source is accurate). You can do lots of profile analysis of the potential buyers and sellers.


http://re.boston.com/community/default.asp?address=&city=halifax&AID=233-8b5f3e6f32e4&DataType=1&State=MA&.x=24&.y=8

This is great:

http://re.boston.com/community/default.asp?address=&city=halifax&AID=233-8b5f3e6f32e4&DataType=1&State=MA&.x=24&.y=8
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