Shorter Commutes = Stable Housing Values

A very interesting article in NPR yesterday.

Home Prices Drop In Areas with Long Commute

by Kathleen Schalch

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.

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.

Stiff says home buyers’ attitudes have changed. The old rule was, “Drive ’til you qualify” — meaning they should go out from the city until they could get what they wanted at a price they could afford.

Stiff says buyers are now asking different questions: “What is the cost of gasoline? What is the cost of my time?”

Values here in the metro area will soon stabilize as many who moved to the second ring find they have to move back, oppressed by spending as much as $200 a week just to get back and forth to work.

More and more buyers who I work with have a short commute to work as one of the top factors in their decision on what will be the right home for them.

More Later….

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