Should you consider the price of gasoline both today and tomorrow when buying a house? I say yes. See why inside.
Should you consider the price of gasoline both today and tomorrow when buying
a house? I say yes.
The last time gas went over $4 a gallon it caused the economy to crash. It would likely do it again. That one thing alone would likely drop house prices even more.Â
There is another aspect many ignore. If I get 20 mpg in my car and gas is $4 a gallon that really costs me 20 cents a mile. But WAIT!!!. I drive both ways to work. So every mile extra cost me 40 cents. If I am looking at a house that is 20 miles away that is a cost of $8 per day, $40 per week, and (Rounded off by 4 weeks) $160 per month. That does not include oil changes, tires or repairs. We really need to double the cost of gas for repairs. It does cost close to $1 in repairs for $1 in gas over time. That would be $320 per month to drive.Â
If instead I bought a comparable house that was only 5 miles from work the amount spent driving to work would only be 1/4 that amount. $320 / 4 = $80 a month. That is a $240 a month saving (plus the car itself) by moving 15 miles closer to work.Â
I know, not many people look at it this way. But as gas gets more expensive more and more people will. It is likely that will drop house prices the further away from work people get. Now imagine what it would look like if gas went to $6 a gallon. Shocking isn't it?
It is very likely in the future as energy prices rise that people will move closer to work and shopping centers. That should increase the price of housing close to the metro center and decrease house pricing that is further away.Â The further away from town as energy costs increase the less desirable the property will become.