Making the housing-gas price connection

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The hometown paper makes the housing-gas price connection this morning, reporting that housing markets in outlying suburbs are suffering in part because of their remoteness: ‘Outlying areas like the Antelope Valley and the Inland Empire have long appealed to people who were willing to accept a burdensome commute for the chance to own a better house. But buyers are increasingly factoring gasoline costs into their purchase decisions, said Dan Griffith, a Rancho Cucamonga-based real estate agent.’

More: ‘Christopher Leinberger of the Brookings Institution, a Washington think tank, says home values in these so-called exurbs may continue to languish long after urban markets begin to recover, thanks to higher gas costs.

‘Under the old model we have lived with for the past 50 years, you could drive away from major employment concentrations until you could qualify for a house because cheap energy costs made it possible,’ Leinberger said. ‘Now as energy prices go up, the housing prices out there on the fringe take a major hit.’

If the phrase ‘drive ... until you could qualify’ rings a bell, it should. Bloomberg News recently quoted Robert Lang of the Metropolitan Institute at Virginia Tech describing the housing bubble in outlying suburbs, saying ‘it was drive until you qualify’‘for a mortgage.

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Photo Credit: LA Land