by Bill McBride on 6/25/2008 01:40:00 AM
Wednesday, June 25, 2008
Peter Goodman at the NY Times writes about an upscale Denver exurb that is getting hit hard by a combination of the housing bust and high oil prices: Rethinking the Country Life as Energy Costs Rise. Here is a great quote:
“Living closer in, in a smaller space, where you don’t have that commute,” [Denver exurbanite Phil Boyle] said. “It’s definitely something we talk about. Before it was ‘we spend too much time driving.’ Now, it’s ‘we spend too much time and money driving.’ ”Michael Corkery at the WSJ writes in the Development blog: Rising Gas Prices Crushing Housing Recovery in Inland Empire
Even though falling prices in California’s Inland Empire are making homes more affordable, rising gasoline prices are crushing hopes of a housing recovery in this area, east of Los Angeles.This is a problem all over the country, see this Bloomberg story on the Washington area: Wealth Evaporates as Gas Prices Clobber McMansions, or this post on Temecula, CA.
“Land that was purchased with expanding metro areas in mind has already been hard hit in value,” says [Deutsche Bank analyst Nishu Sood]. ”Sustained higher gas prices could render it effectively worthless.”
As I noted before, any lifestyle dependent on low gas prices - and low gas mileage vehicles - is becoming uneconomical. For those that own a home in a remote location, work in construction, and drive a low gas mileage vehicle, this must feel like a depression.
Posted by Bill McBride on 6/25/2008 01:40:00 AM