Location, location, location...should gas prices sway your home selection?
Homes near train stations, buses, and lots of jobs are back in vogue, and suburban McMansions are out like a fat kid in a game of dodge ball. Call it suburban contraction following decades of suburban sprawl.
A survey of 900 Coldwell Banker real estate agents found that 78% are making their clients more interested in city living. Some workers are planning to save more than $100 per month on gas costs by moving closer to the city.
In a way this increased focus on gas prices in the search for homes makes sense, but I'm not sure that it's really that rational. If you save $100 on gas, that's really only a savings of $50 compared to when the cost of gas was $2. A $100 savings sounds good, but living closer to the work has always reduced transportation costs, so it's important to realize that the savings may be more marginal than you think.
If you want to live in the suburbs, is it really worth sacrificing that lifestyle to avoid spending $50 a month more than you would have if you'd made the same decision a year ago? I somehow doubt it, for most people anyway. There are a lot of ways to add $50 a month that don't involve living somewhere you'd rather not. And remember: if moving into the cities becomes more popular in the face of rising gas prices, cities will get even more crowded, and you'll have to deal with everything that goes along with that.
My suggestion: before you put too much emphasis on transportation costs in your home buying decision, do the math: figure out your cost and how much you'll save on gas at price of $1 a gallon, $2, $3, $4, $5 and maybe $6. Then ask yourself it it's really rational to move to the city -- you might find that you're being emotionally swayed by the media barrage of new about soaring gas prices.