Rising gas prices, declining suburbs

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A while back I posted a lengthy bloviation arguing the housing bust will hit much harder in far-flung suburbs. Update: A new study argues that, not only will suburbs be harder hit in this downturn, but also that rising gas prices were the tipping point that caused the housing bubble to burst.

‘The gas price spike popped the housing bubble,’ according to a new report from the group CEOs for Cities, which adds, ‘Growth in housing prices was fueled by low and stable gas prices from 1990 through 2004.’

More: ‘Although housing prices are in decline almost everywhere, price declines are generally far more severe in far-flung suburbs and in metropolitan areas with weak close-in neighborhoods. The reason for this shift is rooted in the dramatic increase in gas prices over the past five years.’

The report concludes, ‘The rise in gas prices has fundamentally altered the landscape of urban housing markets in a way that will not quickly be undone, barring an unforeseen collapse in oil prices.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: ‘She’s real fine, my $4.09,’ submitted by Pete to the ‘Pain at the Pump’ album on Your Scene at latimes.com.